In light of the Commodity Futures Modernization Act’s clarification of the CFTC’s jurisdiction over retail foreign currency trading, the CFTC issues an advisory and a revised consumer alert addressing the offering of foreign currency tradin opportunities to the retail public. The advisory explains how firms may lawfully offer foreign currency trading opportunities and the consumer alert warns the public of the risks of foreign currency trading and of foreign currency scams.

President Clinton signs into law the Commodity Futures Modernization Act of 2000, which, among other things, reauthorizes the Commission for five years, overhauls the Commodity Exchange Act to create a flexible structure for the regulation of futures and options trading, clarifies Commission jurisdiction over certain retail foreign currency transactions, and repeals the 18-year-old ban on the trading of single stock futures. On the same day, the CFTC withdraws most of the New Regulatory Framework; however, the amendments to Regulation 1.25 concerning investment of customer funds by futures commission merchants and derivatives clearing organizations are made effective immediately with some technical corrections. The amendments permit investment of customer funds in new types of instruments, such as money market mutual fund

The CFTC approves rules implementing the New Regulatory Framework. These rules are later superseded by passage of the Commodity Futures Modernization Act of 2000 and most new rules were subsequently withdrawn.

The CFTC and Securities and Exchange Commission announce an agreement providing for joint jurisdiction over security futures products, that is, single stock futures and futures on narrow-based stock indices. Under the agreement, which will be incorporated into the Commodity Futures Modernization Act of 2000, the CFTC retains exclusive jurisdiction over futures contracts on broad-based stock indices

The Commission participates in the first annual international Internet Surf Day, organized by the International Organization of Securities Commissions (IOSCO), which targets futures and securities fraud and abuse on the Internet. This Surf Day includes the participation of approximately 220 individuals from 21 regulators in 18 countries. The second Surf Day takes place on April 23, 2001

The CFTC permits use of electronic signatures in lieu of handwritten signatures by customers of futures commission merchants, clients of commodity trading advisors, and commodity pool participants

February 22, 2000—The CFTC transmits to Congress a staff report, “A New Regulatory Framework,” which recommends changes to the CFTC’s regulatory structure. The report details changes that will lessen the regulatory burdens on U.S. futures markets by creating a more flexible regulatory framework. At the same time, the framework provides the over-the-counter (OTC) markets with greater legal certainty. Much of this framework will be incorporated into the Commodity Futures Modernization Act of 2000.

FXCM Holdings LLC has made an unprecedented public release of its balance sheet and invites other firms within the forex industry to follow its example.
Highlights of the (unaudited) balance sheet include the following:
$145,072,098 In Capital (Assets Minus Liabilities)
$179,381,756 In Operating Cash (Excludes Client Funds)
Drew Niv, CEO of the global trading firm, commented: "FXCM is proud of our financial discipline and strong balance sheet. We believe clients should have the necessary information to make intelligent choices. By releasing this information, we hope to set an example for the entire forex industry."

The yen (円 en / ien'e?) (sign: ¥; code JPY) is the currency of Japan It is the third most-traded currency in the foreign exchange market after the euro and the United States dollar.[citation needed It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling. As is common when counting in East Asia, large quantities of yen are often counted in multiples of 10,000 (man, 万) in the same way as values in Western countries are often quoted in thousands.

Starting on Tuesday and over the next two weeks our friends on Wall St. will get Q1 earnings reports. Earnings are forecasted to drop 36.6% year-over-year and I expect to see some surprises, both upside and downside. All markets will likely take their lead based on sentiment from participants in the equities markets.

Since we first forecasted the bear market rally in our 1-March outlook, I've not personally seen any indication it has to come to an end. If you read back through my blog even on the days where Wall St. lost 200-points or more I never said the bear market rally was over and stated it as such.

Over the next two weeks it could be a different story... the past 30-days Wall St. has shrugged off bad economic data while reacting euphorically to the rash of surprisingly good data. That's a clear sentiment shift. Fundamental data and corporate earnings, however, are two totally different things and they represent the state of the economy using two totally different views.

It's easy for the government to manipulate certain data sets they know market participants will react positively to. Earnings data is far less likely to be fudged and will give a more accurate representation of economic conditions in my opinion. The Dow and S&P 500 are entering earnings season having made the strongest gains since 1933. They are well up over 20% and what really complicates matters is that both indexes are sitting near key resistance levels at the start of earnings season. 

What's it doing and where's it going? I haven't really got a clue. I still don't like trading it but I did make money on it today, it was the only pair I made money on but it required me waiting for a nearly 100% probability to take a trade, and those types of probabilities don't come along every day in this market...

Prior to the EUR/USD showing a 100% probability of a buy, the pattern sequence of its seven prior 30-minute opens had never been made in the history of the EUR/USD. I've got every 30-minute opening and I never saw the EUR/USD make a downside pattern sequence in that kind of a way and my data confirmed what I was seeing... it never happened before. When the euro did finally bottom, the 100% probability of the euro moving up 50-pips showed itself between the 1.3358 and 1.3368 level. 

The RBA is a totally different story... as we talked about in yesterday's commentary, the RBA is much stricter with their monetary policy, the Australian economy has yet to enter a full recession, and I am not expecting to hear any announcements from the RBA about quantitative easing, forced currency devaluation, or alarming rhetoric. Those are all very good things for the AUD.
 As bullish as I am on the AUD/USD, tonight's rate decision is not without its risks... based on my research it appears most economists and market participants are expecting the RBA to hold rates steady at 3.25%, which is still historically low for the bank. At their last meeting the RBA held rates and said they wanted to see how economic conditions in Oz evolve. Well, they have deteriorated a bit since then and I believe there is a good probability the RBA cuts rates by 25bps.
 The other risk for the AUD is potential negative rhetoric or a negative outlook from the RBA. Over the longer-term view, I'm bullish on the AUD and I believe there is excellent upside potential for the AUD/USD. Because of the risks and the potential for a surprise cut, I will not attempt to pre-position myself in the market with an AUD/USD trade. The pair has been in a fairly tight range and for the sake of good risk management, I'd rather be patient and wait to see what the RBA does and says, then make my moves accordingly.
 Taking a trade prior to the event or convincing myself the RBA will hold rates even though I know there's a chance they could cut would not be a smart thing to do... it's pure speculation. Even this commentary is just my best guesstimate but should I take a trade on the pair after the announcement I will be glad to let traders know what I'm doing in the market with the AUD/USD

I do not expect the BOJ to move on rates, they are already at 0.10%, it's not like they can go much lower anyway. What I am expecting from the Japanese is nothing but JPY negative sentiment, rhetoric, and overall monetary policy. I do not see the BOJ saying or doing anything at all whatsoever to support the JPY right now. With the Japanese economy in shambles and the BOJ staying on a course of loose monetary policy, I'd be shocked to see anything other than the JPY getting trashed again post rate announcement. The BOJ's announcement is always tentative, so be on the look out for something from them after the 2300 EST timeframe and on. 

Some time late this evening or after midnight, the BOJ will release their decision on the BOJ overnight call rate along with a monetary policy statement. The RBA will release their interest rate decision and monetary policy at 1230 EST / 0530 GMT on Tuesday. Post Options

Traders ask me all the time, "when will the euro drop, why won't the euro drop, what's keeping the euro so supported..." Well, for now it's the EUR/USD's strong correlation to the equities markets and what's happening with the yen crosses, and the battle being waged in the EUR/GBP market that is smacking it around. The EUR/USD has no legs of it's own to stand on and there's really not much rhyme or reason for the moves it's making on a daily basis.

Sometimes I really hate the euro, especially when we get the type of data we've had today... we learned Eurozone GDP dropped by 1.6% in Q4 which was more than expected and the worst decline in 13-years. Household spending dropped 0.3% while Eurozone investment sank a staggering 4%. Eurozone exports are down 6.7%.

How the euro can even be above 1.3000 is a total mystery to me, it makes no logical or fundamental sense, but again, the EUR/USD is tied directly into the S&P 500, and when equities are hot, the euro is hot. Will it change? I don't know, I can't predict that, but I think at some point market participants have to come to their sense and destroy the euro.

It's my opinion that ECB interest rates must come lower and they will have to at least begin buying corporate-sector debt and possibly government debt if they can get the laws changed to do so. ECB Quaden said:

There's a piece of fundamental data that mostly goes unoticed but is extremely revealing and important for us to consider... Consumer Credit. Credit and consumerism go together like Lennon and McCartney, peanut butter and jelly, and politics and corruption...

You can't have a consumer if you don't have a credit, and if the consumer can't get credit, he can't be a consumer because Americans have no savings, they have an average of four credit cards that are maxed to their limit, and they can't use their homes as ATM machines because they are upside down and don't even have the FICO score to get a car title loan at this point.

Today we learned Consumer Credit dropped by $7.48 billion, which is an annualized decline of 3.5%. The boom times of the 1990s and 2000s were built on the back of easy credit and consumerism. Obama, Bernanke, and Geithner are urging consumers to spend, they are doing everything in their power to re-inflate the economy through cheap and easy credit, but it's not working.

The emotions of fear and greed that overcome over a trader when they see a market running hot and heavy causes the following thoughts and ideas to enter their mind:

• "I've got to get in on this move or else I'm going to miss out"
• "There's no way this thing is going to stop now and if I get in, I'm going to clean up big time"
• "If I miss this run, I'm losing money"
• "I could have made 200-points had I bought-in on this move, but I can still get in now and make some money"

Those traders that have been following my trading and my philosophies on trading know that my style and methodology revolves around the theory that all markets overshoot and over-extend themselves, and that the highest probabilities for any trade is to play the market's reaction that comes after the market has exhausted itself to the upside and downside.

Based on what I know about all tradeable markets, I've identified the two factors that cause all markets to over-shoot. The other beautiful thing, those two factors that cause all markets to exhaust themselves also cause them to run the other direction once the exhaustion reaches the point of no return... 

Magnets
Manpower services
Medical products & services
Metro & rail equipment
Mobile x-ray systems
Molded wood products
On-line lottery systems
Power generation systems
Propulsion systems

Satellite uplink systems
Sealants
Telecommunications equipment
Television production systems
Transportation engineering
Transportation systems
Video lottery systems
Water treatment products
WorldStar Vehicle Manufacturing Factories

Aircraft
Aircraft grade metal products
Architect & engineering services
Automated fingerprint identification system
Bohemia crystal & glassware
Business services
Chemical products
Command and control systems

Construction services
Counterfeit Cop
e-commerce & m-commerce software
Electric meters
Electronic Stamping
Environmental products
Furniture
Internet Software
Kevlar

USTIC works with American and foreign companies, providing them with international business, marketing and government relations expertise, to secure sales and project contracts in specific countries in the Asia-Pacific region, Eastern and Western Europe, the Middle East, Latin America, Africa and the former Soviet Union.

     Projects in which USTIC principals have been or are currently involved include mass transportation systems, power generating plants, environmental pollution control programs, telecommunications and computerized on-line systems. USTIC has worked successfully for companies that manufacture automated fingerprint identification systems, telephone network equipment, mobile television production, satellite uplink and cellular telephone systems, medical diagnostic products, pharmaceuticals, computers and peripherals, power utility instruments, transportation equipment, furniture and diverse consumer products and commodities.

     USTIC works with American and foreign investors on investment opportunities in the United States and other countries. USTIC successfully completed the acquisition of an American automotive parts company by a foreign investor and has structured joint ventures between U.S. and foreign companies. Currently with local investors, USTIC's establishing vehicle manufacturing facilities in developing countries.

     USTIC's ability to work effectively for its clients is enhanced by the company's close working relationships with major trade associations and bilateral business councils, many of which were created by USTIC's founder. USTIC principals also offer clients their comprehensive familiarity with U.S. government and multilateral agencies responsible for international trade and investment issues and programs.

     Finally, USTIC is experienced in assisting clients to secure financing from U.S. and international financial institutions, both in Washington, D.C. and other world capitals.     

U.S. Trading & Investment Company (USTIC) develops new, or expands existing international trade and investment opportunities for a select group of companies that look to it for assistance, action and results. USTIC takes full responsibility for the successful completion of its assignments.

     Since its founding in 1982, USTIC has helped its corporate clients secure sales and project contracts worldwide. It has marketed American products and technologies internationally. It has brought together buyers and sellers of diverse products and commodities. It has helped American and foreign firms to structure investments, and establish strategic alliances, joint ventures, licensees, distribution networks and representative sales offices in scores of countries. USTIC has also performed financial engineering services for its clients, drawing on U.S. Government and international financial institution resources.

     Headquartered in Washington, D.C., USTIC draws its management team from senior levels of the international business and government communities. It can provide targeted and effective assistance on a range of international situations respecting diverse business sectors and geographic regions.                 

EU Trade Commissioner Peter Mandelson on Doha

EU Trade Commissioner Peter Mandelson recommends Carnegie's new study, Winners and Losers: Impact of the Doha Round on Developing Countries. 

Sandra Polaski Web Commentary, July 30, 2008

Despite the collapse of the Doha trade talks this week, the global food crisis is creating the basis for longer term progress on a new agricultural trade regime. Key differences over agriculture as well as manufacturing and services trade seemingly stymied a final deal, but progress on farm talks bodes well for an eventual pact that better reflects the needs of developing countries and the poor.

Uri Dadush Policy Outlook, March 2009

Aggressive action is needed to address the global financial crisis, but bailouts could—if not orchestrated carefully—provoke a devastating global trade war. Leaders at the G20 meeting on April 2 must devise a coordinated and transparent plan to re-ignite growth and avoid a resurgence of protectionism.

This report presents a new, path breaking model of global trade as a tool to analyze the potential impacts of the negotiations and underlying economic interests of the WTO’s diverse members. 

Riad al Khouri Carnegie Paper, June 2008

Free trade agreements between the West (U.S. and EU) and Middle East and North African (MENA) countries, while containing beneficial elements, have strengthened negative perceptions of “western-led globalization” because they benefit unpopular elites and impose serious short term economic adjustment.

The U.S. and China have developed good relations over the past eight years, but mutual misunderstanding persists. President Obama should recognize the importance of cultivating personal ties with Chinese leaders and visiting East Asia soon after taking office and avoid aggressive public language on hot-button issues.

Carnegie trade experts study U.S. trade flows, free trade agreements, labor and environmental standards, and the political challenges of making globalization work for more people in more countries.