As the credit crisis teeters on the verge of full-blown catastrophe, the hunt for the culprit(s) begins. Quickly working his way to the top of the blame table is Alan Greenspan, former Chairman of the Board of Governors at the US Federal Reserve Bank. During his tenure and even into retirement, Dr. Greenspan received near-universal praise for presiding over the Fed during a record period of economic growth and price stability. In fact, he coined the term Goldilocks economy to describe the optimal economic situation in which growth is maximized and inflation is kept to a minimum.

Recently, public opinion has begun to turn on Dr. Greenspan for his perceived role in the current economic crisis. The extended period of easy money over which he presided, combined with his laissez-faire approach to regulation have been identified as two chief causes behind the inflation and subsequent collapse of the housing bubble. In the interest of truth (to preserve his legacy, say cynics), Dr. Greenspan has embarked on a media tour, defending his policies and his ideology. Ultimately, the onerous task of sorting out the causes of the credit crunch will be left to economic historians, but that doesn’t prevent us from scrutinizing the facts and coming to our own conclusions here in the present.

1. Low Interest Rates: Precipitated by the bursting of the technology bubble and exacerbated by the 9/11 terrorist attacks, the US economy slid into a recession that lasted for two years. The Fed, under the leadership of Dr. Greenspan, moved quickly to slash its bechmark Federal Funds Rate to 1%, the lowest level in nearly 50 years. At the time, Dr. Greenspan was acclaimed by economists for mitigating business cycle volatility and returning the economy back into a period of rapid growth. In hindsight, however, this period of easy money may have enabled the run-up in housing prices that caused the current housing crisis. According to a paper published by the European Central Bank, the Fed kept rates too low for too long. According to the paper, there exists a theoretical natural rate of interest, which “keeps output at its potential and inflation stable, once any shocks to the economy have played out.” Witness the connection to Dr. Greenspan’s pursuit of the Goldilocks economy! The ECB used a sequential monte carlo algorithm to simulate the post-9/11 deteriorating economic conditions and the Fed’s subsequent response. Ultimately, it determined that 1% was below the natural cost of capital, and households were able to borrow at rates which failed to properly account for their creditworthiness- or lack thereof. It is ironic that the Fed’s response to the 2001 recession (which, itself was caused by the collapse of an asset bubble) was to facilitate another asset bubble - this time in housing - which, in turn, may precipitate yet another recession.
2. Weak Dollar: The excessive easing of monetary policy from 2001 to 2003 yielded an unintended consequence: a weakening of the US Dollar. The Euro was already gaining acceptance, and a rising interest rate differential provided the necessary impetus for the Euro to surpass the Dollar, once and for all. As a result, oil prices, which are denominated in Dollars, have risen as the Dollar as fallen. A weaker Dollar has also made foreign imports more expensive for a nation that imports $800 Billion more than it exports. As a result, inflation is slowly creeping up; at 4%, it is certainly past the Fed’s comfort zone and is preventing the Fed from adequately responding to the current crisis. In the words of one analyst, “the Fed took a gamble on inflation to ward off what was perceived as a deflationary threat in 2001-02. The inflationary consequences of that gamble are now here, with the petrodollar monetary merry-go-round fueled by the weaker dollar.” Even Dr. Greenspan believes that it’s “absolutely conceivable that the euro will replace the dollar as reserve currency, or will be traded as an equally important reserve currency.”
3. Loose Regulation: Many critics charge that in addition to low interest rates, loose regulation represents one of the smoking guns behind (the Fed under) Dr. Greenspan’s culpability. The former Chairman is well known for his laissez-faire approach to government regulation, his commitment to which comes across as doctrinaire and ideological. He has insisted that a loose regulatory framework is essential to a dynamic and growing economy, and has argued that “counterparty surveillance” is much more effective than government regulation. With regard to the housing crisis, the Fed’s regulatory failings fall under two subheadings: predatory lending and inadequate collateral.

On the first point, the 1994 Home Ownership and Equity Protection Act “gave the Fed authority to monitor abuses and step in, if necessary, to restrict or stop lenders and their practices.” Unfortunately, the Fed largely failed to take advantage of its newfound power. Credit rating agencies, charged with certifying that the repackaged mortgages were indeed investment-grade, were shocked to discover that some of the mortgage applications lacked even basic contact information for borrowers. In other cases, the borrower’s income wasn’t confirmed, such that it would be impossible for the counterparties - the loan officers that Dr. Greenspan insisted were most capable of regulating the system - to evaluate whether a particular mortgage was appropriate for a given borrower. Thus, over $250 Billion of worthless mortgages have already been written down (declared worthless) since the start of the credit crunch. If lenders had been properly regulated from the start, then perhaps most of these mortgages never would have been extended.

The second point applies to the inability of the financial system to absorb the shock from the unexpectedly high default rate on subprime loans. This failure to anticipate can be traced back to 1998, if not earlier, when the Federal Reserve spearheaded a bailout of Long Term Capital Management (LTCM), a large hedge fund which lost nearly $5 Billion trading complex securities. Some would say that this created a moral hazard situation, whereby banks became comfortable taking larger risks because of the foreknowledge that they would be bailed out if their bets went sour. Sure enough, the current credit crunch was fueled by even riskier practices in the financial sector, whereby mortgages were repackaged into increasingly esoteric securities, held off-balance sheet for tax purposes. In sum, “there was nothing done to head off more such failures…The result a decade later has been the need for another, even more dramatic, bailout.” Thus, the Fed found itself orchestrating an 11th hour sale of Bear Stearns, a near-bankrupt investment bank, to JP Morgan. While this was the only debacle that required the Fed’s assistance, most large investment banks have accepted large cash infusions, due to the Fed’s low collateral requirements.

Dr. Greenspan’s response to these accusations has been uninspiring, arguing that the Fed probably could have done more, but not enough to avert the credit crunch. He has clung to the notion that the markets can police themselves more effectively then the government could ever hope to. According to Naked Capitalism, “the biggest problem with Dr. Greenspan’s posture is that he fails to accept the rationale for regulation. Banking is an industry that can create enormous externalities, namely, financial panics, asset bubbles (which suck investment out of more productive uses) and busts. Even a mere nasty credit contraction exacts a toll on the real economy.” It is no wonder that the government’s official response to the current crisis has been to cut out, rather than impose more, regulations.


4. Indifference to Asset Bubbles: During the height of the dot-com stock market bubble, Dr. Greenspan famously cautioned against “irrational exuberance.” For an encore, why then did he willingly enable another bubble to form? Under Dr. Greenspan, the Fed became famous for its asymmetric response to asset bubbles, whereby the bursting of a bubble was softened by rate cuts, but the bubbles’ inflation was not dealt with through countervailing rate hikes. In this way, investors were encouraged to take larger risks, knowing that if/when the bubble(s) did burst, the Fed would ease monetary policy to cushion the fall. Dr. Greenspan was unbending in his defense of this policy, arguing that the Fed’s job is to deal with economic growth and inflation, rather than to influence asset prices. It is not as though Dr. Greenspan was unaware that a bubble was forming. In testifying before the US Congress in 2005, he, himself, commented that “signs of froth in some local markets where home prices seem to have risen to unsustainable levels.” Even the IMF delicately offered that “some ‘leaning against the wind’ may also prove useful to limit the risk of a buildup of housing market and financial imbalances.” In Dr. Greenspan’s defense, it is not clear that a more “symmetric” response to the inflation of the housing bubble would have produced a different outcome. This is because short-term rates, which the Fed controls, have slowly become disentangled from long-term rates (which the Fed does not control), such that the Fed cannot effectively set the risk premium that is built into mortgage rates.
5. Greenspeak: Dr. Greenspan was famous for his abstruse way of communicating with investors, policymakers, and the news media, which has been nicknamed “Greenspeak.” For example, the testimony listed above also included the following nugget of wisdom: “to the extent that some households may be employing these instruments to purchase a home that would otherwise be unaffordable, their use is beginning to add to the pressures in the marketplace.” Dr. Greenspan claimed the ambiguity was deliberate, as it allowed him the flexibility necessary to zig and zag when conducting monetary policy for the world’s most dynamic economy. On one occasion, he poked fun at himself, suggesting to policymakers that “if I say something which you understand fully … I probably made a mistake.” In hindsight, however, perhaps a little more clarity would have behooved the Chairman in communicated the long-term risks inherent in the housing bubble.
6. ARM Recommendation: In a 2004 speech which has since reverberated around cyberspace, Dr. Greenspan offered the following piece of advice: “American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.” He also intimated that borrowers would benefit by using adjustable rate mortgages instead of fixed rate mortgages, although in the same breath, warned that this benefit would not inure to homeowners in a rising interest rate environment. This comment speaks to one of the key trends underlying the housing bubble: the proliferation of esoteric mortgage products. Adjustable-rate mortgages became especially problematic as the Fed began tightening in 2005, and many investors were unable to adjust to rising interest payments. When housing prices reversed course and began to decline, many investors were shocked to discover that their mortgages had also reversed, such that their equity was now negative. Dr. Greenspan’s de facto endorsement of complex mortgages products, such as those of the “interest only” and “pick a payment” variety, paved the way for the the millions of defaults on subprime mortgages that ensued.

Dr. Greenspan’s ideology has been a recurrent theme throughout this article. Those familiar with the former Chairman’s background should recall that he was an early admirer of Ayn Rand, a prominent novelist, whose works read like expositions on free-market economics. In addition, Dr. Greenspan was appointed by a Republican president, Ronald Reagan. Some degree of bias is to be expected, even accepted, and the fact that Dr. Greenspan was a staunch defender of free-market principles need not have precluded him from managing an institution which is supposed to be apolitical. Unfortunately, the story painted above suggests that Dr. Greenspan allowed his ideology to infuse his job. Ironically, the man famous for ambiguous “Greenspeak” was often deliberately unambiguous when opining on taxes, regulation, and other issues of policy. Two years removed from his position, Dr. Greenspan has argued dogmatically that increased regulation and an earlier tightening of monetary policy would not have prevented the housing bubble. According to an interview with the Wall Street Journal, “Mr. Greenspan says he doesn’t regret a single decision. In his view, many critics are ignoring evidence in his favor and failing to assess the process by which he made decisions.” He insists that his comments on ARMs were taken out of context and that the people most qualified to police mortgage lenders are….mortgage lenders, themselves. Suffice it to say that if he is ultimately found guilty on the charge of inciting the current housing bubble, Dr. Greenspan will probably lodge an appeal.

In today’s economy, investors need all the help they can get. Fortunately, there are many investment bloggers out there willing to lend a hand. Here, we’ll take a look at 50 of the best of these bloggers, from stocks to real estate.

General Investment

Check out these blogs for a broad view of the current state of investment.

1. The Street: Visit TheStreet to find out what Jim Cramer and other investment experts have to say.
2. Long or Short Capital: Check out the advice at Long or Short Capital for a scientific look at investments.
3. 22Dollars: 22Dollars has a nice mix of personal wealth and investment analysis.
4. The Big Picture: Visit this blog to get a good look at capital markets and beyond.
5. Word on the Street: Check out this blog from Ant & Sons to get helpful news, commentary, and analysis.
6. Ticker Sense: On Ticker Sense, you’ll get a good feel for the state of investment, primarily focusing on US stocks.
7. Investing Blog: This blog has a little bit of everything, with stocks, forex, hedge funds, and more.
8. InvestorTrip: Check out InvestorTrip for great advice about both US domestic and international equity markets.
9. The Peridot Capitalist: Check out The Peridot Capitalist for expert commentary, news, and analysis of the markets.
10. Seeking Alpha: Seeking Alpha has lots of news and commentary on investment and the economy.

Stocks

In these blogs, you’ll find a plethora of information and advice for investing in stocks.

11. Project Stocks: Visit Project Stocks for information about the stock markets and a variety of other investments.
12. CrossingWallStreet: This blogger loves the stock market, and it shows.
13. Maoxian: Visit Maoxian for down to earth insight and commentary on stocks and other investments.
14. Random Roger’s Big Picture: Check out this blog to get information about portfolio management, stocks, funds, options, and a lot more.
15. Ugly Chart: This blog analyzes stocks and the general investment market.
16. The Kirk Report: Charles Kirk aims to help the “little guy” investor with lots of useful information.
17. Move the Markets: Check out Move the Markets for strategies and lifestyle advice for traders.
18. Fallond Stock Picks: This blog has lots of commentary and stock picks, all based on technical analysis.
19. The Stock Bandit: Jeff White’s Stock Bandit offers stock picks as well as topics like chart patterns and knowing when to stop trading.

Forex

Check out these blogs to see what the experts are doing in forex investment.

20. Grace Cheng: Grace offers forex advice and more on this blog.
21. PipStop: Get updates and advice on forex with PipStop’s blog.
22. Forex Blog: Check out this blog to get an in-depth look at how the markets and current events are affecting forex trading.
23. Piptopia: Rob at Piptopia writes about trade ideas, economic analysis, and other important information for currency traders.

Commodities & Futures

If you’re trading commodities and futures, be sure to check out these blogs.

24. Global Gold Perspective: Here you’ll find analysis, news, reports and commentary on gold, silver, and forex.
25. MineSet: Jim Sinclair offers news and commentary on gold, oil, and beyond.
26. Commodities and Futures Trading Blog: Stay up to date on the commodities and futures markets with this blog.
27. Gold Stock Bull: Check out this blog for investment help in gold, silver, and energy.

Options

Get the dirt on the options market with these top-notch blogs.

28. Option Addict: Jeff Kohler is an option addict, and he’ll share his knowledge with you.
29. Daily Options Report: Check out the Daily Options Report for ongoing options commentary.
30. Simply Options Trading: Get simple information about options trading from this blog.
31. Option Pundit: Visit Option Pundit to get awesome strategies for options investment.
32. Condor Options: Check out this blog for advice related to iron condor investment.

Real Estate

Use these blogs to keep a watchful eye on the real estate market.

33. Transparent Real Estate: On this blog, you’ll get a look at strategies for real estate investment and marketing.
34. Paper Economy: Paper Economy tracks the current US real estate bubble.
35. EquityScout: Check out EquityScout for ongoing commentary on the state of real estate investment.
36. Real Estate Investing For Real: On this BiggerPockets blog, you’ll learn about goals, current events, and lots more.

Ahead of the Curve

Stay on top of the markets and ahead of the rest with these blogs that will give you the scoop.

37. The Underground Investor: This blog breaks stories before the mainstream media gets to it.
38. The Buttonwood Speculator: This broad-based look at the markets will keep you ahead of the curve.
39. Footnoted: This blog takes a look at SEC filings to find the juicy details companies don’t want you to know about.
40. Controlled Greed: On this blog, you’ll find undervalued stocks poised to make a great profit.
41. 10Q Detective: Like Footnoted, 10Q Detective is another great site that offers an in-depth look at SEC filings.

Industry

Stay on top of what specific industries are doing using these blogs.

42. Biohealth Investor: This blog offers loads of information on the biotech industry, and offers aggregated information from other sites.
43. TechCrunch: Check out TechCrunch for analysis of the Internet startup industry.
44. The AAO Weblog: Here you’ll find information about the accounting industry as it relates to investment analysis.

Entertainment

Investing is serious business, but these blogs aim to make it fun.

45. Wallstrip: Julie Alexandia’s Wallstrip pokes fun at publicly traded companies, investment figures, and more.
46. Infectious Greed: Paul Kedrosky’s blog offers investment advice with a bit of humor mixed in.

Reports & Commentary

These blogs offer plenty of technical assistance to investors of all kinds.

47. Bill Cara: A three-year Forbes ‘Favorite,’ Bill Cara offers excellent commentary on investing and the economy at large.
48. Traderfeed: Brett Steenbarger serves up great information on psychology, historical patterns, and more.
49. ChartSetups: ChartSetups offers a simplified look at technical analysis.
50. Trader Mike: Trader Mike has loads of watchlists and recaps on this blog.

Central Bankers

The first main group of influential Forex figures includes the people who run the world’s most powerful financial institutions – the Central Banks. These leaders are usually appointed by their government to run and manage the monetary policy for their country (or league of countries, i.e. the European Union). As we all know, Central Banks determine many important factors that have a huge impact on currency trading. Arguably the most important duty of a central bank is to determine whether to raise or lower interest rates. The power these people have ranks them as perhaps the most influential on our list. Let’s introduce you to the world’s most influential central bankers:

1. Ben Bernanke, Chairman of the US Federal Reserve Bank

Ben Bernake was sworn in as Chairman of the US Federal Reserve System on February 1, 2006 and is widely regarded as the most powerful man in the financial world. He had previously served on the Federal Reserve Board from 2005 to 2006 and was serving as the Chairman of the President’s Council of Economic advisors when he was appointed to succeed Alan Greenspan as Chairman of the Fed. Every word the Chairman speaks concerning the U.S. economy is carefully scrutinized and has tremendous influence on the value of the dollar. A recent example is when Chairman Bernanke announced that the US housing market may have a negative impact on U.S. growth for “somewhat longer” than expected. The dollar immediately dropped with the news.

2. Jean-Claude Trichet, President of the European Central Bank (ECB)

Holder of what is widely regarded as the second most powerful financial position in the world, Jean-Claude Trichet serves as the President of the European Central Bank. President Trichet presided as the President of the Bank of France before being appointed to head the ECB. Often regarded as overly conservative in his monetary policy-making, President Trichet is notoriously deliberate and precise in his decisions. Critics complain that he is typically too slow to respond to changing European conditions; however, admirers praise the way he has handled the difficult economic issues facing the European Union.

3. Toshihiko Fukui, Governor of the Bank of Japan

Toshihiko Fukui is credited as being one of the most progressive leaders in the Bank of Japan’s history. Many people have attributed his successes to his unconventional thinking, most notably his efforts to combat the country’s six-year struggle with deflation by implementing monetary-easing programs. Last year he announced that the Bank of Japan would return to conventional interest-rate target policies. This has recently been tested as the Yen has reached an all-time low against the Euro and a 4 ½ year low against the dollar on the back of effectively negative real interest rates.

4. Mervyn King, Governor of the Bank of England

Mervyn King is Governor of the Bank of England and Chairman of the Monetary Policy Committee. He has been involved with the Bank of England for over 15 years, including his service as the Chief Economist and Director from 1991 – 1998 and Deputy Governor from 1998 – 2003. Mr. King has enjoyed a successful tenure as chief of the Bank of England and has earned the praise of his peers for his handling of the UK economy. He is characterized by a tendency towards formulating strong academic arguments and evenly presenting both sides of an issue before making a decision.

5. Jean-Pierre Roth, Chairman of the Swiss National Bank (SNB)
Appointed Chairman of the Governing Board and head of Department I of the Swiss National Bank, Jean-Pierre Roth presides over the Swiss National Bank. He often plays the role of the traditional Swiss banker, but has also made efforts to respond to slowdowns in Switzerland by keeping interest rates low.

6. David Dodge, Governor of the Bank of Canada

Perhaps the most blunt central banker, David Dodge was selected to head the Bank of Canada in February 2001. Known for expressing his opinions on the health of the loonie (Canadian Dollar) in a frank manner, he has also shown his ability to raise interest rates when he feels inflation is on the horizon.

7. Glenn Stevens, Governor of the Reserve Bank of Australia

Glenn Stevens recently replaced Ian Macfarlane as head of the Reserve Bank of Australia. So far, Glenn appears committed to operating the Australian central bank in a manner similar to what was established under Ian Macfarlane. Namely, he has sought to preserve the independence of the Reserve, to target inflation of 2-3% over the course of an economic cycle, and to maintain the accountability of the Reserve when changing interest rates.

8. Allan Bollard, Governor of the Reserve Bank of New Zealand

Allan Bollard is another inflation hawk with a strong background in economics. He is a passionate supporter of free markets who has also at times implemented a restrictive monetary policy in order to keep inflation in check.

9. Philipp Hildebrand, Vice-Chairman of the Swiss National Bank

As one of the youngest members of our influential people list, Philipp Hildebrand is also unusual in his background among his fellow central bankers. Instead of rising from the ranks of bureaucracy or the ivory tower, Philipp spent most of his career in private industry before being invited to serve as member of the Swiss National Bank.

10. Alan Greenspan

Though he no longer holds his title of US Fed Chairman, Alan Greenspan is perhaps one of the most influential figures ever in financial markets, and the retired Fed Chairman still casts a long shadow- most recently when he made comments about a possible US recession and financial markets plummeted. His successful policies while head of the US Federal reserve system are often emulated by leaders of other Central banks.

11. Ottmar Issing, former Chief Economist of the European Central Bank (ECB)

Ottmar Issing is one the leading authorities on ECB economic issues and tends to favor conservative monetary policy. Like Greenspan, even though he no longer holds his former title, he is still well-respected and carries significant clout concerning issues on the European economy.

Government Officials

Our next collection of significant individuals includes other government officials who exert influence over aspects of the world economy but are not directly related to their countries’ respective central banks. Nonetheless, these individuals have a tremendous impact on the fiscal policy and overall financial health of their countries. You will notice we have excluded heads of states from our list and, while they are still very important to the strength of their country’s currency, we have decided to include figures that are more directly related to the currency markets.

12. Condoleezza Rice, US Secretary of State

The Forex market is truly a global market and is affected greatly by public policy decisions. No one has been at the center of more geo-political events over the last few years than Condoleezza Rice. She has been recognized by Forbes magazine as the most powerful woman in the world in 2004 and 2005 (second in 2006) along with being one of only three people to be ranked as one of Times Magazine most influential people four or more times (2004 – 2007). She definitely has the wherewithal to shape the world’s political climate, and hence currency markets.

13. Rodrigo Rato, Managing Director International Monetary Fund (IMF)

As head of the International Monetary Fund (IMF), Rodrigo Rato is intimately involved in the world’s economy. Article I of the IMF’s Articles of Agreement states that the IMF works at: promoting international monetary cooperation; facilitating the expansion and balanced growth of international trade; promoting exchange stability; assisting in the establishment of a multilateral system of payments; and making its resources available (under adequate safeguards) to members experiencing balance of payments difficulties. With such stated goals and the backing of almost every major country in the world, Rodrigo Rato has tremendous influence on the world’s currency markets.

14. Peer Steinbruck, Finance Minister of Germany

Peer Steinbruck was appointed as Finance Minister of Europe’s largest economy in 2005. He has focused on lowering Germany’s budget deficit, but has received mixed reviews while in office.

15. Henry Paulson, US Secretary of Treasury

After being hugely successful in the private sector, Henry Paulson was appointed US Secretary of Treasury in June of 2006. Henry Paulson served as CEO of Goldman Sachs before his appointment to run the Treasury and is well acquainted with private banking and finance. Many pundits suspect his appointment was based on his relationship with Chinese economic officials, and he has been quite vocal about Chinese currency and economic issues.

16. Gordon Brown, Chancellor of Exchequer UK

James Gordon Brown is currently Prime Minister of England and leader-designate of the Labour Party in the United Kingdom. Previously, he was the longest serving Chancellor of Exchequer and oversaw the longest period of sustained economic growth in UK history. While this claim has been challenged, his influence on the world economy remains significant.

17. Christine Lagarde, Minister of Finance France

Christine Lagarde is the first woman Minister of Finance for France. Even before her appointment as Finance Minister, Christine was ranked the 30th most powerful woman in the world by Forbes magazine.

18. Sadakazu Tanigaki, Finance Minister of Japan

Appointed Minister of Finance for Japan in 2004, Sadakazu Tanigaki has been quoted concerning Forex markets as saying, “Currency levels need to reflect fundamentals in a stable manner…Abrupt moves that don’t reflect that are undesirable.”

19. Hiroshi Watanabe, Vice Finance Minister for International Affairs of Japan

Hiroshi Watanabe is Japan’s Vice Finance Minister for International Affairs of Japan and is the most quoted Japanese official concerning foreign exchange markets. He has expressed concerns in the past when he felt the Yen was overvalued against the dollar.

Private Industry

This last section of Forex’s influential people examines the actual participants in the Forex market. While the previous two sections described the people who set policies and laws, which change how the currency market behaves, this part takes a look at the people active in the private sector. We have included three investors, two CEOs of large corporations, and one Forex analyst. All of these individuals have a profound effect on the industry of currency trading.

20. George Soros, co-founder Quantum Fund

George Soros owns the world-renowned Quantum hedge fund and often executes large, successful currency trades. He earned the reputation on Black Wednesday as “the man who broke the Bank of England” when he sold short more than $10 billion pounds (and earned $1.1 billion) due to England’s reluctance to either raise interest rates or float its currency.

21. Warren Buffet, CEO Berkshire Hathaway

The Oracle of Omaha is perhaps the world’s most famous investor. Warren Buffet’s influence is tremendous and investors of every kind seek his advice on various markets (last year someone paid $620,100 just to have lunch with him!) Two years ago, he bet over $20 billion against the USD and lost $1 billion as the Dollar rose over the course of the following year. (However, it is reported that his company was still up about $2 billion on the deal). He created a buzz earlier this year when he entered the Forex market after a 2 year hiatus and then announced he wouldn’t disclose which currencies he was buying until next year.

22. Joseph C. Lewis, Principal Investor Tavistock Group

Though private about his personal life, Joseph C. Lewis is one of the most powerful Forex traders. Joseph Lewis has amassed a personal fortune of several billion dollars through currency trading and subsequent investments. A leader in the move to take currency trading online, Joseph Lewis and his Tavistock Group developed Hotspot FX, Inc., which allows traders to have better access to placing trades on the internet. The Tavistock group recently sold the company for $77 million.

23. Charles Prince, CEO Citigroup

As CEO of the world’s largest bank, Charles Prince has significant influence on the way in which currency trading is conducted. Citigroup accounts for large volumes of the daily Forex market of which Mr. Prince ultimately manages.

24. Tom Lasorda, CEO Chrysler Group

Tom Lasorda took over the Chrysler Group in 2005 and has been an active voice in the Forex market. Throughout its history, Chrysler has at times made more money trading currency than selling cars. LaSorda has been an active critic of the Japanese Government’s involvement in trying to control the value of the Yen in order to help its industry and has pressured the US government to do the same.

25. John Hardy, Analyst for Saxo Bank

A regular featured guest on CNBC flagship programs including “Squawk Box,” “Worldwide Exchange,” “Power Lunch” and “Closing Bell,” John J. Hardy is recognizable to many European business television viewers as the face of Saxo Bank currency analysis. Formerly chief FX strategist for the Danish-based online investment bank and anchor of Saxo’s popular live-streamed Market Call, Hardy has tremendous influence due to his visibility and unique approach to technical analysis.

Listen and Learn

These leaders’ decisions and announcements should have a profound influence on your strategies as a Forex trader. The more you know about them and their opinions, the better you will be at evaluating the world’s financial markets. As these influential people shape the financial world you can learn to identify the affects that their policies and transactions have on the price of the currencies that you are trading. Who knows? Maybe one day you’ll make our list…

News and information on the rapidly unfolding economic crisis is pouring forth on a daily basis. “Prominent investment bank announces $10 Billion write-down and records first quarterly loss in years; Stocks tumble as fallout from housing crisis spreads; Rating agencies criticized for role in credit crunch” represent a small cross-section of headlines. Unfortunately, most of the reporting speaks to the crisis itself and its ultimate causes, rather than to what the near future holds and to what can be done to prevent a complete collapse.

Too much ink has been spilled trying to understand whether the crisis was inevitable and by extension, whether more or less financial regulation would have produced a different outcome. Perhaps, there exist more important questions, such as “What can be done now?” and “Is recession inevitable?”

This paper aims to explore- if not answer- these questions, through the prism of US monetary policy. In short, what can the Federal Reserve Bank do to forestall economic recession, or is it already too late?

1. Housing Bubble: From 2001 to 2005, millions of mortgages were extended to unqualified borrowers, enabling a record run-up in housing prices. As the Fed raised interest rates to cool the economy, many of these homeowners suddenly found themselves unable to make payments on their mortgages, especially those of the adjustable rate variety. Since the inception of the credit crunch, a sudden aversion to risk and the foreclosure on millions of properties has led to a tremendous supply/demand imbalance in the housing market. As a result, prices have certainly stopped rising and even started falling in certain regional markets. The National Association of Realtors recently announced that 2007 saw the largest drop in existing home sales in 25 years, and “the first price decline in many, many years and possibly going back to the Great Depression.” All of this data presents an economic problem of catastrophic proportions because most of the average American family’s equity is tied up in its home. During the boom, many families refinanced or borrowed using home equity loans, which was used to fuel corresponding booms in spending and in the stock market. The situation has since reversed itself. According to Merrill Lynch, “Nearly 9 million households now have upside-down mortgages, and for the first time ever, aggregate mortgage debt is bigger than the total value of homeowner equity by $836 billion.” In short, says US Treasury Secretary Henry Paulson, the “housing decline is the most significant risk to our economy.”
2. Wall Street: On a related note, the second area of economic concern is Wall Street, which both packaged the mortgage securities in question and invested heavily in them. In February 2007, HSBC became the first investment bank to acknowledge losses ($10.5 Billion) on subprime investments, kicking off the credit crunch. Since then, virtually every financial institution- with the notable exception of Goldman Sachs- has announced massive write-downs on subprime investments. Estimates are hard to come by, but at least $160 Billion in losses have already been accounted for. How much worthless debt remains on the books is anyone’s guess. The low estimate, $285 Billion, was offered by S&P (rating agency) and the high estimate of $600 Billion is claimed by UBS (investment bank), which recently wrote down $20 Billion of its own investments. These write-downs are driven by a widespread default rate on subprime mortgages, estimated by one analyst at 30-40%. As a result of the defaults, several prominent hedge funds have collapsed, scattering debris to the four corners of the financial universe. Of more significance is the breakdown of financial institutions, themselves. Bear Stearns, an investment bank, collapsed suddenly and spectacularly, such that the Federal Reserve Bank of New York had to cobble together an 11th hour sale of the firm to JP Morgan in order for Bear to avoid declaring bankruptcy and risk destabilizing the entire financial system. Then there are the companies that insure the mortgage securities, and the lending institutions that originated them, which are also in trouble. Finally, the quasi-governmental organizations FANNIE MAE and FREDDIE MAC, which provide the system with liquidity by acting as buyers of last resort for mortgages, have capped their exposure due to mounting losses. In short, any assessment of the likelihood of recession must first estimate the risk of further unanticipated subprime write-downs and consequent bankruptcies in the financial sector.
3. Inflation: Shifting gears for a moment, the second item of concern is inflation. While not technically germane to the discussion of economic weakness, inflation is important because it limits the Fed’s ability to loosen its monetary policy. While the Fed’s mandate is not specifically to facilitate price stability (as compared to most Central Banks), it is still an important factor in its monetary policy. The current situation is unique because inflation is rising while economic growth is falling, threatening to return the US to the “stagflation” of the 1970s. The prices of commodities have risen dramatically over the last year. Gold and oil recently breached the psychologically important thresholds of $1000/ounce and $100/barrel, respectively, though they have since retreated. Prices of certain food staples, such as rice and corn, have doubled, due to surging demand in emerging markets and shortages caused by a shifting of farmland to the production of biofuels. In addition, the value of the USD has eroded the purchasing power of US consumers. [The Dollar has fallen by 70% against the Euro over the last five years]. The US is on pace to import nearly $2.5 Trillion worth of goods and services in 2008, which means every 1% in currency depreciation costs the US $25 Billion! As a result, the US consumer price index (CPI) is growing at an annualized clip of 4%, well above the stated comfort zone of 2%. This could inhibit the Fed from cutting rates further.
4. No Confidence: Connected to inflation is the loss of confidence among consumers. According to Merrill Lynch, “By the end of 2007, 36 percent of consumers’ disposable income went to food, energy and medical care, a bigger chunk than at any time since records were first kept in 1960.” The same article also noted that more families are eating meals at home, a sign that discretionary spending is being curtailed. Consumption represents the backbone of the US economy. Thus, it bodes ill that consumer confidence is at its lowest level since the early 90’s, having dipped below the trough it reached during the 2001 recession. Even Starbucks has admitted feeling nervous; during a recent press conference, it suggested that the ailing consumer could interfere with its corporate restructuring plan. In addition, unemployment is slowly creeping up, recently breaching the 5% mark for the first time in two years. Since unemployment is a lagging economic indicator, it won’t peak until one to two years after the height of the economic downturn. It should be noted that financial institutions are leading the way in job cuts, by trimming their own staff.
5. Credit Spreads: Credit Spreads refer to the cost of capital, for both debt and equity, which lenders and shareholders receive in compensation for risk. The spread is basically a percentage tacked onto the risk-free rate (yield on US Treasury Securities). One of the main symptoms of the credit crunch is widening credit spreads, in which investors demand higher interest rates to compensate them for higher perceived risks. As a result, many bond and equity issues have been delayed, as companies wait for more favorable conditions to emerge. In addition, hedge funds and private equity funds are finding it increasingly difficult to raise funds to support their activities, which is negatively impacting stock market valuations. From an economic perspective, credit spreads are problematic because companies are either unable or unwilling to secure the capital required for massive projects and consequently from hiring workers to develop and staff those projects. Underlying the widening of credit spreads is a collapse in trust. An unnaturally large percentage of securities that were rated AAA (very unlikely to default) and that were recommended by investment banks, now run the risk of default, which makes investors reluctant to lend and invest further. In fact, “global first-quarter underwriting volume tumbled 45% from a year earlier to $1.27 trillion, and fees collected by Wall Street investment banks fell 47% to $5.8 billion,” according to the Wall Street Journal. From the standpoint of the Fed, widening credit spreads are problematic because even if it cuts rates, investors may still demand the same return, and net liquidity won’t change.
6. Sagging Stock Market: Since peaking in early October, all of the major US stock market indices have declined. The S&P 500, the broadest measure of US stock market performance, is down 16%. In fact, the first quarter of 2008 marked the worst start of a year ever for US equities. That’s EVER. These numbers are significant because the stock market is considered a reliable leading indicator for the economy. Thus, the collapse in stock market prices-which may not yet have bottomed out- signify that investors are bearish on the economy’s near-term prospects for recovery. In addition, the downward trend in stocks has been accompanied by a surge in volatility. According to the Wall Street Journal, “the S&P 500 moved more than 1% on 51% of the trading days in the first quarter, the biggest percentage since 1934 and the fifth-largest percentage in the index’s history.” Moreover, the Fed’s interest rate cuts, which were intended to create liquidity in the various financial markets, failed to lift stocks and reinforced the notion that the wounds inflicted by the credit crunch are too deep to be healed by monetary policy alone.
7. Monetary Policy: The Fed, itself, represents the next reason why it may be too late for the Fed to act to prevent recession. Interest rates have already been cut by a total of 300 basis points, capped by a massive 75 basis point cut on March 18. As a result, the benchmark Federal Funds Rate now stands at 2.25%, which is actually negative when adjusted for inflation. Speaking of inflation, the Fed will likely hesitate to lower rates further because doing so would come at the expense of price stability. Furthermore, monetary policy is not the only area where the Fed has been active; it has also announced that it will set aside up to $400 Billion for lending to financial institutions and banks. The Fed will offer both short-term loans and longer-term loans collateralized by illiquid mortgage-backed securities in an effort to increase lending activity. “The Federal Reserve…is trying to ease an acute credit squeeze by agreeing to hold large volumes of mortgage-backed bonds that Wall Street firms are struggling to sell and providing them with…cash.” Finally, the Fed will take on a larger regulatory and oversight role of the financial sector. The unregulated origination and subsequent repackaging and collateralizing of mortgages is considered one of the prime causes of the current crisis. In short, the Fed may have hamstrung itself by acting too quickly and exhausting the tools in its arsenal.
8. Fiscal Policy: When monetary policy isn’t enough, the next best alternative is fiscal policy. Unfortunately for the Fed, Washington lawmakers have already acted, unveiling a $150 Billion economic stimulus package. The plan is supposed to ignite the economy through tax cuts to individuals, families and small businesses. President Bush has personally insisted that the stimulus plan is all that is needed to return the economy to solid footing, but the government’s track record suggests that the outcome is far from certain. Taxpayers behaving rationally would save, rather than spend their tax rebates, in anticipation of future, offsetting tax increases. Either way, it will be three to six months before economists can begin to measure the effects of the tax rebates.

Based on the grim situation outlined above, it appears the Fed’s hands ARE tied. All of the leading indicators, namely those which measure confidence and stock market performance, suggest that the prospects for averting recession are bleak. In addition, both the Federal Reserve Bank and the Federal Government have already unveiled massive initiatives to prime the pump of the economy and stimulate lending and consumption, respectively. The Fed is constrained from lowering rates further because of inflation, and the government is loath to spend more because of the fiscal deficit. Thus, both entities may be relegated to the sidelines for the duration of the crisis, watching with baited breath to see if their actions were sufficient to prevent a complete economic collapse.

The American presidential election is rapidly drawing near. The race is becoming more intense and the field of candidates has narrowed to such that a detailed look at each of their platforms makes sense. The focus of this article is on Barack Obama, one of the leading contenders for the Democratic Party’s nomination. Of primary interest for traders in the forex markets is his economic policy, though there is significant overlap between his positions on taxes, trade, and the economy. In addition, his proposed health plan and energy plan, for example, both carry important economic implications, and hence should be considered within the context of how his presidency would bear on the US economy.

Since his platform is broad, complex, and often nuanced, we have distilled it into ten more manageable subdivisions, which are laid out below.

1. Increased Tax Equity: Mr. Obama’s tax policy typifies the liberal stance of his party, favoring a system that is equitable and progressive, above all else. The core component of is tax policy would bring tax relief to the middle-class. Whether he would pay for this “relief” through a tax increase on the upper class or through budget cuts is uncertain. It will not be financed through a bond issue (increase in government debt), as he has pledged to balance the budget. [More on this below]. In addition, Mr. Obama has pledged to eliminate so-called “tax havens” for the wealthy and loopholes in the tax code exploited by special interest groups. It is expected that this increase in tax revenues will partially offset the middle class tax cut.

   How Mr. Obama’s tax policy would impact economic growth defies prediction. Subscribers to the infamous “Laffer Curve” would argue that a fall in middle-class tax rates would theoretically increase unemployment and hence, increase government tax revenues. However, since America’s wealthy contribute a disproportionately large share to the coffers of the Federal government, a tax increase on the rich could theoretically lead to a decline in government tax receipts. This idea remains controversial, and most politicians conveniently err on the side of the argument that is consistent with their politics. This lack of clarity means it’s inappropriate to comment definitively in this article.

2. Fair Trade: Barack Obama’s trade policy eschews both protectionism and unbridled globalization in favor of the more fashionable “fair trade.” Insofar as trade is conducted fairly, he is an advocate. On the other hand, when governments are belived to use unfair tactics, such as subsidies, dumping, and exchange rate manipulation, he favors countervailing efforts to block such trade. For example, he has vocally argued that the perceived undervaluation of the Chinese Yuan represents an indirect subsidy for Chinese exporters, and he favors legislation that would “equalize” the playing field.

   In addition, Mr. Obama supports an increase in America’s domestic manufacturing sector and a consequent increase in employment. As with some of his other policies, he has been vague on how this would be achieved, whether through subsidies or tariffs, or a less conventional method. Finally, Mr. Obama supports energy independence, which basically translates into less reliance on foreign oil and gas producers.

In its entirety, this loosely sketched trade policy represents a significant break with the unapologetic free-trade stance of the current Bush administration. While it is doubtful that many of these measures could be implemented, the trade imbalance could be singlehandedly reversed by a decrease in energy imports, which represents an estimated 35% of the total deficit. Classical economic theory dictates that in order to correct a trade imbalance, a nation’s currency must depreciate proportionately. If this theory is applied to the US, a shrunken trade deficit achieved by an Obama presidency should stem the multi-year decline in the Dollar.

3. Employment Versus Growth: Mr. Obama’s criticisms of the Bush Administration’s economic policy have centered around the “jobless recovery,” whereby America’s economy enjoyed strong growth while the unemployment rate hardly budged. Accordingly, Mr Obama would prioritize employment over economic growth. Since free-trade is theorized to maximize growth, Mr. Obama’s “fair trade” policies could come at the expense of efficiency, and hence GDP growth.

On the other hand, he supports rural investment, increased access to capital among minorities and the poor, and improvements in the nation’s transportation infrastructure. All of these measures are consistent with both employment and growth. In addition, his support for renewable energy, innovation (via an R&D tax credit), and a greater emphasis on math and science education, aim to cement America’s status as the world’s leader in technology and innovation. The current flow of capital and labor (albeit not always ideas) favors developing countries, so Mr. Obama’s proposals are somewhat against the grain. The payout for the US economy could be large but it could also be costly.

4. Support for the environment: One of the recurring themes of Mr. Obama’s campaign is support for the environment. While environmentalists have delighted in promises of marine and forestry preservation, the direct economic implications are less cut-and-dried. It has long been argued that economic growth and concern for the environment are diametrically opposed. This notion is certainly belied by the boom in alternative energy, which is supported by Obama. In addition, Obama’s proposed cap on carbon emissions could force businesses to become more efficient. However, it could also come at the expense of output, as corporations curtail production to be meet more stringent environmental standards. Finally, Mr. Obama is a staunch proponent of ethanol, part and parcel to his pursuit of energy independence. While this directly benefits the US economy, it has also been shown to increase food prices as land is diverted from food production to energy production. Thus, while GDP would increase and the US would likely receive more foreign capital, the purchasing power of US consumers as well as the value of the Dollar would be eroded.

5. Expansion of Home Ownership: Barack Obama has promised to make home ownership both easier and more affordable, especially for poor families. Unfortunately, one of the byproducts of the current expansion of such housing has been the subprime lending crisis, one of the primary causes of the economic downturn. Of course, Mr. Obama has also pledged to crack down on so-called “predatory lending,” in which complex mortgage products with artificially low interest rates are used to lure unsuspecting borrowers.

6. Skepticism of Business Establishment: While not stated explicitly in his platform, Mr. Obama is generally opposed to “big business.” He has pledged to rein in predatory lending through increased regulation of mortgage companies. He uses hostile language to describe healthcare insurance companies and managed care organizations, which he views as part and parcel of the never-ending rise in healthcare costs. In addition, he will fight special interest lobbies generally, and the mortgage lobby specifically by making it easier for individuals to declare bankruptcy. Currently, there is a loophole which exempts certain obligations (namely mortgage payments) from re-negotiation during bankruptcy, and presumably this would be modified. Then there is his concern about M&A between large companies, which he perceives as anti-competitive and limiting of consumer choice. The icing on the cake will take the form of an investigation of conflicts of interest on Wall Street, where consolidation has created situations where pre-existing client relationships can compromise objectivity.

In short, the the business establishment is dreading an Obama presidency, with its strict regulatory climate and consumer protections. Some analysts believe that the stock market performs better under Republican presidents because of the perceived friendliness with Wall Street, but ultimately economic factors will predominate, and good investors don’t put too much stock in the President’s ability to sway the markets.

7. Support for small businesses: It may come as a shock to those who have grown accustomed to the handful of large corporations dominating the business landscape that the brunt of the US economy is powered by small businesses. In fact, one of the few positions Mr. Obama shares with President Bush is his support for small businesses. Accordingly, he will use a combination of tax relief and healthcare subsidies to facilitate growth in this vital sector of the economy. The healthcare subsidies will take the form of direct reimbursement for healthcare benefits paid by small businesses, many of whom are struggling to provide health insurance for their employees. This could prove difficult to implement because of the tremendous costs involved, and would need to be offset by cuts in other areas of the budget.

8. Labor Equity: Unions remain a bastion of the Democratic Party, and a large source of conflict with the Republican Party. To his credit, Mr. Obama’s position is somewhat more nuanced than that of his Party. He supports a broad spectrum of labor rights, including enhanced protections for the right to unionize and promoting a work-life balance, perhaps by expanding the Family & Medical Leave Act which was signed into law during the Clinton administration. His final goal of a higher Federal minimum wage has been largely preempted by individual states, which have taken much initiative in this regard.

Labor rights are similar to environmental protections in that both are seen as antithetical to economic growth. Free-market economists are typically opposed to unions and wage floors because they necessitate wages higher than what the market would otherwise pay. Accordingly, Mr. Obama’s position represents a sop to the fear of cheap foreign labor (whether immigrants or workers abroad) percolating in the working class. This jives with his fair-trade policy, which would prioritize domestic employment over efficiency.

9. Foreign Policy: Mr. Obama’s foreign policy would be decidedly less aggressive than that of the Bush administration. He favors soft power, in the form of diplomacy and foreign aid, over the hard power of a strong military. Controversially, he has volunteered to meet with all foreign heads of state without any prerequisites. At the same time, he has also pledged to continue expanding the military, both in terms of manpower and technology.

The economic implications of foreign policy cannot be overstated. Due in part to the ongoing wars in Iraq and Afghanistan, it now costs the US government an estimated $1 Trillion per year to conduct its foreign policy. In addition, it has been estimated that the total costs of the war in Iraq could exceed $3 Trillion by the time the US has successfully extricated itself. The majority of this outlay will be financed by debt. Thus, a Barack Obama presidency can be expected to increase the budget of the defense department but decrease discretionary military spending. In addition, the US maintains embargoes and/or limits trade with certain nations for political reasons, which could also change if Mr. Obama was elected. Finally, the price of oil is connected with geopolitical events. This is exacerbated by the fact that a significant portion of the world’s oil is controlled by regimes that are viewed as hostile by the US. This is reflected in the significant risk premium (estimated by some analysts at $20 per barrel) currently built into the price of oil. Improved relations with these governments (Venezuela, Iran, Nigeria) could lead to a reduction in the price of oil.

10. Fiscal Discipline: From an economic standpoint, fiscal policy represents a natural segue way from foreign policy, because it is among the largest components of the Federal budget. Mr. Obama has pledged to restore fiscal discipline by curtailing earmarks and re-introducing a system of PAYGO into the budgeting process, whereby spending increases must be simultaneously offset before they can be approved. Social security will be shored-up, and further reinforced through incentives to save for retirement. Lower medicare costs will be obtained through negotiations with healthcare insurance and pharmaceutical companies. Overall, the goal is modest one: a balanced budget.

An impressive agenda, to be sure, but Mr. Obama’s senatorial record on fiscal policy is mixed. On the one hand, he spearheaded ethics reform legislation to cut Congressional waste and only designates earmarks for public projects. On the other hand, he voted against using the Program Assessment Rating Tool (PART) to pay down the Federal deficit by automatically reducing spending on programs deemed ineffective. He has also voted against cuts in entitlement spending and agriculture subsidies. Thus, if Mr. Obama has any real intention of reducing the national debt, or at least of balancing the budget, he may have to break with his Party.

Democrats are generally viewed with skepticism when it comes to the economy. With his emphasis on consumer and worker rights, as well as in maximizing employment and wages instead of efficiency, Barack Obama is set to become the rule of his Party, rather than the exception. At the same time, his fair-trade brand of protectionism and his threats to limit unfair competition from abroad could reverse the trade deficit, which has surged since the 1980’s. The trade imbalance could also be narrowed by the switch to alternative energies, many of which could be generated domestically. Finally, his promise of fiscal responsibility stands in stark contrast to the runaway government deficits of the Bush administration. With a healthy economy and budgetary prudence, he could even hope to begin paying down the national debt. While less conducive to economic growth, protectionism and fiscal discipline would stem the twin deficits, and go a long way towards restoring confidence in the Dollar.

The majority of forex traders, whether amateur or professional, can be expected to have some degree of familiarity with the fundamental factors which weigh on the Dollar. One can plainly understand, for example, how the threat of inflation and the twin deficits make the Dollar less valuable. In fact, currencytrading.net has already compiled a comprehensive list of such factors, entitled 50 Factors that Affect the Value of the US Dollar. However, many of these factors are common knowledge, and, thus, it can be difficult to gain a competitive advantage over other traders who have access to the same information. After all, when certain closely-watched economic indicators are released, the markets react almost instantaneously, making it difficult for the average retail investor to squeeze out a profit.

Thus, it is perhaps more valuable to temporarily ignore the most obvious factors (while maintaining a rolodex in the back of your mind), and instead focus on certain “unconventional factors.” In fact, there are many undercurrents flowing through forex markets, which only the savviest of traders are able to identify. Discerning these secondary factors represents the key to understanding forex, especially since many of these trends underlie the primary fundamental factors. For example, it is not enough to understand that the US twin deficits are rising or that interest rates are falling; rather, one must understand why they are moving in their respective directions. The following list is intended to provide the reader both with examples of such factors as well as with a framework for developing his own list of unconventional factors.

1. Institutional Investment Trends

Ultimately, what moves the forex market is supply and demand; in this regard forex is no different from any other securities market. In other words, while inflation and interest rates appear to drive the market, they are actually driving the decision-making processes of market participants, who, in turn, influence the supply and demand for specific currencies. In addition, the majority of the world’s currency is exchanged through the interbank market. This market consists of a few centralized exchanges located around the world, where financial institutions exchange large blocks of currency, usually in increments of $1 million or greater. Since retail investors exert little or no force on the $3 Trillion-per-day global forex market, it makes sense to focus our microscope on institutional investors, namely hedge funds. In fact, hedge funds have extended their tentacles into forex to such an extent that the Chicago Mercantile Exchange has decided to introduce a special electronic exchange, catering specifically to hedge funds.

The hedge funds which are most prominent in forex are so-called “Global Macro” funds and “Emerging Market” funds. Global macro funds scrutinize global economic fundamentals and allocate capital accordingly. In reality, most of these funds make predictions about the global interest rate climate: how interest rates will behave in relation to each other. Since currencies are often seen as proxies for interest rates, many global macro hedge funds are active participants in forex markets. Emerging market funds, in contrast, target the capital markets of developing economies. The stock markets of Thailand and Vietnam, for example, have surged over the last few years as hedge funds have piled in, driving their currencies higher as well. Sometimes, emerging market funds target currencies directly, in a play on inflation. For example, there are several countries which peg their currencies to the Dollar. These pegs are almost always inflationary, and hedge funds have taken notice, betting that these currencies will be forced into appreciating against the Dollar. Those who recall George Soros (via his eponymous hedge fund) famously “breaking the Bank of England” and forcing the Pound upward should appreciate this strategy.

2. Petrodollars

Due to recent geopolitical developments, it has become widely known that the buying and selling of petroleum around the world is conducted almost entirely in Dollars. Thus, every country must necessarily maintain a reserve of so-called “petrodollars” to be used for the purchase of petroleum. On the flip side, those countries that are net exporters of oil have found themselves with a surplus of Dollars, which they have piled into US assets. Estimates of combined Middle East foreign exchange reserves number as high as $1.6 Trillion. In fact, many analysts believe the Dollar’s status as the world’s reserve currency- despite its recent multi-year decline- can be largely attributed to the petrodollar phenomenon. By extension, the main threat to the Dollar is the possibility that oil contracts will one day be settled in another currency. Iran has already announced a plan to open up an oil bourse, in which oil will be sought and sold using Euros, although this plan has been hold for over one year.

3. Japanese Interest Rates

In addition to petrodollars, the ‘carry trade’ phenomenon should be extremely familiar to forex traders. The carry trade refers to the trading strategy in which one currency (the Japanese Yen) is borrowed at a low interest rate and sold in favor of a higher-yielding currency. Obviously, it is only because Japanese interest rates remain extremely low that the carry trade has been able to flourish. Countries with comparatively high interest rates, such as New Zealand and Australia, will continue to have trouble holding their currencies down for as long as Japanese interest rates remain low. Even the Dollar has remained steady against the Yen, despite the recent economic divergence between Japan and the United States.

Moreover, traders have speculated that it would require a rise of 200 basis points in Japanese interest rates for the carry trade to lose its appeal, an event which is extremely unlikely to occur by the end of 2007. Instead, a little bit of volatility in forex markets might go a long way in coaxing the currency upward. The Economist has drawn an analogy of the current situation to 1998, when Russia’s default on its sovereign debt made hedge funds nervous, and they quickly unwound carry positions they had been maintaining at the time. The result was a rapid appreciation in the Yen.

4. Chinese demand for raw materials

In another feature, we noted that China’s unending economic boom is one of the prime factors behind the global rise in commodity prices. From cement and steel to support construction projects, to oil and natural gas to power its cars and satisfy its hunger for energy, China’s raw material needs are massive. ‘What does this have to do with forex?’ you are probably wondering. The answer is simple: those countries with large reserves of natural resources have seen their economies boom and their currencies rise. The Canadian Dollar has already achieved parity against the US Dollar, and the Australian Dollar is not far behind. The Russian Rouble has also outperformed. Those who wish to understand the appreciation of these three currencies should look no further than record-high commodity prices, for which Chinese demand is largely responsible.

5. Investor/Consumer sentiment

The importance of investor and consumer sentiment in forex markets is connected with the notion that perception is reality. Amateur, investors often make the mistake of focusing all of their attention on coincident and lagging indicators , such as employment and GDP, when making investing decisions. Savvy investors, however, devote equal attention to leading indicators- of which market sentiment is one- which represent a proxy for future economic performance. For example, if investors/consumers indicate a pessimistic outlook, it is likely that future economic growth will be lower. As a result, investors will be more likely to shift capital away from the US, which would drag down the Dollar.

6. US Real Estate Prices

This factor is probably the most conventional on this list, especially given the current economic milieu, where business headlines are dominated by coverage of the US sub-prime mortgage crisis. The housing/construction sectors have historically only accounted for a modest portion of US economic growth. However, the period of easy money that followed the collapse of the tech bubble in the late 1990’s led to a rapid run-up in real estate prices. An exceptional tolerance for risk in the financial community enabled buyers that were barely credit worthy to take out mortgages at impossibly low interest rates. In addition, existing homeowners rushed to cash in on the rising value of their houses by refinancing their mortgages and taking out a home equity loan. As everyone knew, the party had to end at some point, and the collapse in confidence is now threatening to spread to other sectors of the economy, perhaps precipitating a recession.

7. IMF and World Bank

While the International Monetary Fund (IMF) and World Bank are certainly diminishing in importance, they continue to exert influence in the developing world. Both organizations can still potentially impact economic growth by lending money for development projects and helping in times of crisis. In some cases, they demand control over member countries’ economic policies in exchange for favorable loan terms. The IMF is now more visible in forex since it officially changed the way it monitors the foreign exchange policies of member nations. Previously, the IMF focused on the internal effects of exchange rate policies, by looking at how the country in question was either harmed or benefited from the policy. The IMF’s new mandate , in contrast, extends to the evaluation of these policies from an external standpoint: how these policies affect other countries. As a result, the IMF is now justified in advising against currency policies that engender global economic instability. Predictably, Iran, Egypt and China have all voiced disapproval of this policy change.

8. Fixed Exchange Rate Regimes

Wait, I thought we were only interested in currencies covered by floating exchange rate regimes? By definition, currencies that are pegged don’t fluctuate in accordance with market principles (if they fluctuate at all), so they’re probably not worth paying attention to, right? While there is certainly some validity to this mindset, these currencies areworth following because at the very least, they impact the currencies to which they are linked. The Chinese Yuan, for example, remains pegged to a basket of currencies, consisting predominantly of Dollars. In order to maintain this peg, China’s Central Bank has been forced to stockpile over $1 Trillion in foreign exchange reserves, also predominated in Dollar-denominated assets. Thus, China’s fixed exchange rate regime, via the buying of US assets, directly supports the Dollar. And of course there are dozens of other examples around the world.

9. Central Bank Intervention

This factor is counter-intuitively included on the list precisely because it does not influence forex. Many policymakers have accused Japan and Korea, for example, of holding down their currencies in pursuit of policies of export promotion. In fact, Korea has recently intervened in forex markets, while Japan has not. Yet, the Won has soared while the Japanese Yen has remained frozen in place. The point illustrated by this example is that Central Banks are rarely able to influence forex valuations despite concerted efforts to the contrary. Even the US is a veteran of forex intervention, having intervened on behalf of the Dollar twice during the Clinton administration. Both times, however, the Dollar was virtually unaffected. In short, when you hear currency traders or policymakers griping about Central Bank intervention, feel free to shake your head and chuckle a bit.

10. US Treasury Secretary

The list of the most influential people in forex would probably be a “who’s who” of politicians, central bankers, and hedge fund managers. However, would you believe that the US Treasury Secretary is just as important, if not moreso, when it comes to forex? The reason is that the Treasury Secretary represents the US in matters of currency, regardless of whether the currency in question is the Dollar or a foreign currency. Despite having only recently been appointed, the current Treasury Secretary, Hank Paulson, has been quite vocal about currency issues. He has criticized China and Japan for their weak currencies while maintaining that it is in the best interest of the US to have a strong Dollar.

11. Financial Derivatives

A derivative is a financial security which has no inherent value and instead derives its value from an underlying asset. Financial derivatives, which include forwards, futures, options, and swaps, have proliferated in every branch of global capital markets. In fact, many analysts insist that long term interest rates are now based more on swaps valuations than on government bonds. With regard to forex, derivatives reflect market expectations for future exchange rates. Previously the bastion of professional investors, these securities are now available to amateur investors, who can quote a 12-month RMB/USD futures contract to see what exchange rate investors are willing to accept for delivery of RMB (Chinese Yuan) 12 months from now. With regard to options, traders can look at implied volatility , which can be induced from the price of the option based on the strike price, current exchange rate and time to maturity. Implied volatility offers an instant snapshot of how much investors believe a currency will fluctuate over the term of the option.

12. Composition of the EU

The composition of the European Union (“EU”) certainly has a bearing on the value of the Euro. As of October 2007, the EU had 27 members, and is currently in talks to add 3 more. When a new country adopts the Euro, its effect on the collective EU economy can be labeled either “accretive” or “dilutive.” When a country’s economic growth is higher than the EU average and/or its rate of inflation is lower, its effect on the EU average is said to be accretive. The opposite set of circumstances will have a dilutive effect. You may be familiar with this concept in the context of public company mergers, where analysts use similar language to evaluate the effect of the acquired company’s relative profitability on the acquiring company’s stock price.

13. Rating Agencies

You are probably wondering how rating agencies (S&P, Moody’s, Fitch) can influence forex, since after all, they don’t issue ratings on specific currencies. They do however, issue ratings for government bonds and a mix of other public/private securities. In theory, these ratings should merely serve to reinforce investor opinion since both investors and rating agencies have access to the same information. In practice, however, a great deal of stock is placed on a security’s credit rating, and securities with the same ratings tend to trade at similar valuations. When Iceland’s sovereign debt was downgraded last year, its currency instantly dropped over 10%. In addition, it was not until collateralized debt obligations tied to US subprime mortgages were downgraded that economists and investors really began to take scope of the US real estate crisis, which now threatens to spread to the rest of the economy and drag down the Dollar.

In conclusion, there are numerous factors in forex that escape the attention of the mainstream business media. Even when such factors do receive coverage, the link to forex isn’t clear. This list is in no way exhaustive; while its stated purpose was to bring to the surface a few unconventional forex factors, its broader purpose was to provide insight into a new framework for looking at what drives currencies. Ultimately, the main point is to encourage you to shift your attention to secondary and tertiary factors, which underlie the primary factors of inflation and interest rates, which in turn, drive currencies.

When you think of high oil prices, you’re probably reminded of huge bills at the pump and inflating costs on goods and services. However, the high cost of oil brings on so much more than that. Here we’ll take a look at some of the lesser-known ways high oil prices affect the global economy.

1. Less Asian growth: As China and India grow, they rely heavily on oil, which is part of the reason for the spike in prices. However, they’re shooting themselves in the foot because the higher prices go, the less they can afford, and their growth is slowed. They also use energy less efficiently, so the prices are exacerbated.
2. Bargaining power: With higher oil prices, oil-exporting countries hold the power. This might embolden these nations to become more assertive or demanding of other countries in both political and economic ways.
3. Alternative energy grows: As oil gets more expensive, alternative energy becomes much more attractive. Investment and employment in clean technology goes up right along with high oil prices.
4. European countries are marginally affected: With the dollar declining on the euro, Europeans feel the rising cost of oil much less than others.
5. Bad monetary policy: Rising energy costs are a cause for concern in most households, and governments tend to react to this sort of situation. However, if they react with inappropriate policies, they can make things worse by simply prolonging the inevitable.
6. Exporters hold on to their money: Instead of pumping profits back into the global economy, exporters tend to save them. That means that the global demand will tend to fall.
7. Helps US dollar: Although we’re not seeing this currently, in theory, higher oil prices should support a stronger dollar. This is because oil is priced in dollars, and demand for dollars will increase with higher oil prices and dollar-denominated investment from exporters.
8. Other energy exporters flourish: Exporters of non-oil energy like coal and gas flourish as consumers attempt to shift to cheaper energy.
9. New capital shift: As prices are hiked, investors consider putting their money in other sectors, which has a stimulating effect on the economy.
10. China has a cushion: Although as a developing country China is hit harder by oil prices, they seem to have a cushion as investment moves away from oil, and they maintain a fixed exchange rate with the dollar.
11. The US doesn’t have it so bad: Although your wallet may beg to differ, the United States is not hit as hard as other oil importers because we still produce about 40% of the oil we consume.
12. Government subsidies fail: Some governments subsidize fuel, and higher oil prices put pressure on them. The subsidies interfere with supply and demand, as consumers continue to demand more while prices stay relatively flat.
13. Interest rates go up: As higher oil prices lead to inflation and rigidities in government expenditures, interest rates rise.
14. Oil-producing countries don’t earn as much as you’d think: While the dollar suffers, oil exporting countries are subject to reduced purchasing power as they buy goods in euros.
15. International business suffers: When the cost of oil goes up, flights get more expensive and corporate travel costs go up. This leads to less frequent business trips to international locations.
16. The virtual economy flourishes: As the cost of transportation rises, virtual work and net meetings become more popular.
17. The travel sector suffers: Hotels, cruises, airlines, and others in the travel industry are affected negatively by high oil prices because transportation costs are higher, and consumers are spending less because of stress on their budgets.
18. Countries will stop paying bills: At some point, many countries may be forced to choose between oil and international debt repayments. As they default on these loans, they’ll hurt large international finance institutions.
19. Consumers save more: When consumers are faced with rising oil costs, many create precautionary savings just in case things get worse.
20. Consumers buy cars: Although budgets are being squeezed, consumers will buy more cars, presumably to upgrade to a more fuel-efficient foreign model.

1. Afghanistan: A Taliban resurgence, among other concerns, is keeping many traders away from the afghani, Afghanistan’s currency. The country has many immediate challenges to face, but a solid currency will eventually be important if Afghanistan is ever to become a fully developed nation. Though historically tied to the dollar, the afghani has tended to depreciate dramatically in recent decades. Afghans able to do so have accumulated dollars due to U.S. currency’s safety, thereby marginalizing the afghani. The falling dollar, along with legislation mandating that many types of transactions be conducted in afghanis, may bolster the national currency and help to position it as the currency of choice.
2. Argentina: Argentina’s efforts to prevent its currency from strengthening too quickly have helped prevent the dollar from falling against the Argentine peso. The country is now one of a few bargains left for American tourists . That holds true for American businesses considering international expansion, as well. A capital influx from North America would dramatically increase Argentina’s chances of full recovery from the economic collapse of 2001.
3. Belarus: Belarus currently pegs its currency, the ruble, to the Russian ruble. That’s set to change in 2008, when the country will sever the tie with Moscow and link the Belarussian ruble to the dollar. The move has more to do with politics than monetary poilcy, but Belarus may be timing its conversion just right. The dollar is near a three-year low against the Russian ruble. If American currency continues to fall, Belarus could essentially buy in to the dollar at a particularly low value, then sit back and wait for appreciation. “Buy low” is just as true for the forex market as it is for the stock market.
4. Canada: The U.S. dollar has recovered somewhat after bottoming out at less than 94 cents to the Canadian dollar, or “loonie,” in November. Nonetheless, the Canadian dollar continues to reap the benefit of attaining some overdue respect. Gone are the days when Robin Williams joked, “Canadian money is also called the loonie. How can you take an economic crisis seriously?” The currency of such a highly developed and stable country, which maintains a GDP in the global top ten despite having a population lesser than Sudan’s, may find itself playing a larger role on the world stage, thanks to its recent performance against the U.S. dollar.
5. China: All things considered, the weak dollar is probably a losing situation for China. It puts increased pressure on the Chinese government to let the artificially weak yuan appreciate in the open market, and it forces the massive number of companies who supply U.S. imports to raise the prices they charge American buyers. But it also gives China more political bargaining power by drawing attention to the so-called “nuclear option” of economic policy. That term (which comes from the Chinese government-controlled media itself) refers to China’s ability to dump some of its huge dollar holdings, thereby wrecking the dollar. Most of this threat is just posturing, of course — and even if China were to sell off it’s dollars, the damage it caused would dramatically reduce the value of the dollars it hadn’t yet sold — but the weak dollar is helping China show the world that it will not be bullied .
6. India: Cheap dollars and expensive foreign currencies make American outsourcing less attractive, right? Outsourcing is basically a way to import labor (at a lower hourly wage than can be had in the domestic market). But, as with other types of imports, Americans who buy that labor are having to pay more for it than they have in the past. That would seem to harm Indian outsourcing companies, which contribute over a third of the country’s service sector output. In fact, the opposite has been true. These companies now have to earn American business, rather than simply rely on the cheapness of their workers. The phenomenon is fostering a culture of innovation like the one that has always helped American businesses achieve success. In addition, the weak dollar is creating buying opportunities for large Indian manufacturers who want to reduce expenses by establishing footprints in the U.S.
7. Mexico: The dollar has not fallen significantly against the Mexican peso yet, but a drop allow importers to buy American goods on the cheap. The country is the second largest recipient of American exports, so the benefit could be significant. At the same time, Mexican exporters would receive less for the goods they sell to the U.S. and therefore have incentive to find new trade partners. More than 85 percent of Mexican exports currently go to the U.S., representing an unhealthy lack of diversification.
8. New Eurozone Countries” The major European economies have had more than enough of the weak dollar, but new participants in the Eurozone — those countries that use the Euro as their currency — might be getting in at the right time. It’s true that, like the Euro standard bearers including Germany and France, their export sectors could suffer due to the relative expensiveness of their new currency. That problem would probably be short-lived, however, compared to the positive effects that would be realized if the strong Euro starts to replace the weak dollar as a global standard for foreign reserves. The newfound stature would increase demand for these countries’ treasury bonds and thereby make government fundraising easier.
9. Switzerland: Switzerland and its currency, the franc, seem to be enjoying the upside of the falling dollar without suffering the downside. Economists believe “the over-valued [euro] boosts Swiss exports to its most important customers and the weak dollar mitigates the rising cost of raw materials that are traded in the greenback.” The current state of the dollar is helping to tame Swiss inflation, as well.
10. The United States!: Calling the dollar “weak” certainly makes it sound undesirable, but it’s not nearly as bad as it may seem. The boost for exporters outweighs the consequences for buyers of imports, and foreign companies that deal in pricier currencies are motivated to build long-term investments here. Most importantly, weakness in a country’s currency does not simply translate into weakness in its economy — even though it may seem so these days.

The recession threat, credit crisis, housing market correction and weak dollar have many Americans looking for someone to blame. Potential targets abound. In the case of the subprime collapse — still the biggest negative influence on the economy — everyone seems to share responsibility. Aspiring home owners took on more debt than they could handle, real estate speculators assumed home prices would rise forever, and mortgage lenders made reckless loans because they were able to sell off the risk. Investment banks packaged the loans into complex securities that even the banks themselves were apparently unable to understand, and the rating agencies supposedly dedicated to disclosing the underlying riskiness cheerfully went along for the ride. Aiming higher, some critics are blaming the Federal Reserve for subprime as well as the greater state of the economy. Here are the criticisms they are likely to voice.

1. Interest rates too low for too long The argument: Former Fed chairman Alan Greenspan’s tenure was marked by aggressive interest rate cuts, beginning after the stock market of 1987. That initial move helped to prevent wider economic consequences, but rate cuts in the late 90’s made startup capital too easy to come by and helped cause to the dot-com bubble. Similarly, failing to raise rates in the past few years encouraged the wave of short-sighted, frenzied borrowing that ended so abruptly in 2007.
2. Selective attention The argument: The Fed always keeps its eyes peeled for signs of inflation, which manifests itself primarily in the prices of goods and services. That means the Fed is keen to deflate any “bubbles” it sees in these markets by taking money out of the economy. It devotes a similar amount of attention to employment figures. Bubbles developing elsewhere, such as in the prices of assets like houses, get lost in the mix. And under Greenspan, they were knowingly disregarded. One critic thinks, “Mr. Greenspan consistently argued that central banks have no legitimacy to intervene to prevent asset price bubbles, and to substitute their judgment for that of millions of market participants. But central banks have no problem whatsoever intervening when they think that product prices are inflating, or when labor markets are overheating.”
3. Stumped by the “conundrum” The argument: The Fed did dramatically raise the target for its most important rate between mid-2004 and mid-2006, but real life interest rates didn’t follow. Greenspan called the phenomenon a “conundrum.” One explanation is that the global spread of capitalism has increased the demand for U.S. debt and thereby made investors settle for lower returns (i.e., lower interest rates). This external market force has “substantially weakened” the Fed, according to an economist in the Fed’s Dallas branch. It follows that the central bank’s reliance on setting interest rate goals first — and following up by changing the money supply afterwards — is outdated. The eminent economist Milton Friedman, for one, said about a year ago that he was “puzzled” by the current order of operations.
4. The “Greenspan put” The argument: The Fed lowered its target for interest rates in 1998 after a major hedge fund collapse. Some on Wall Street subsequently claimed that the Fed under Greenspan’s leadership was artificially supporting the securities markets by manipulating monetary policy. Taking a term from stock options trading, they called this perceived strategy a “put” because it seemed to guarantee a minimum value below which security prices would not fall, regardless of downturns in the market. Financial market participants took excessive risks, believing the Fed would rescue them if things got too bad. That recklessness seems to have carried over into the lending practices that created the subprime disaster.
5. Reward for bad behavior The argument: Just as the Greenspan put encouraged bad behavior, Fed policy in the wake of the economic slowdown seems to reward it. Financial stocks have been justifiably hammered in recent months, but the Fed’s recent economic interventions are tailored to bailing them out first. As one critic has noted, “It has not been lost on the Wall Street titans that the government is the reliable first responder to scenes of financial distress, or that there will always be enough paper dollars to go around to assist the very largest of financial institutions” (see next link). Bear markets must coexist with bull markets in a truly free market, but the Fed seems bent on eliminating all but the upside. That might work in the short term, but not long afterwards. Moreover, it’s not capitalism at all, but a sort of “socialism for the rich.”
6. Warning signs ignored The argument: Early subprime whistleblowers, including a senior Fed official, tried in vain to elicit a reaction from the Fed. It’s true that the Fed should never act as a regulator, but it could have easily called for lending reform. Instead, it did nothing, apparently viewing the environment of deceptively easy credit as a means of propping up the economy and achieving the White House’s much touted “ownership society.”
7. Too little too late The argument: If the Fed has committed to a strategy of lowering target interest rates, it should commit fully and make more significant cuts. Wall Street clearly voiced this argument last month, when it drove the Dow down by almost 300 points after the Fed cut its benchmark rate by one a quarter of a percent rather than a half. The traders’ opinion is biased, of course, but the stock market they control is, for better or worse, the most prominent indicator of the state of the economy. The Fed might have erred on the side of caution, given that a more drastic rate cut would fuel inflation, but critics think it simply extended its penchant for inaction.
8. Wrong on inflation The argument: The Fed’s view of inflation has two significant flaws. First, it focuses on “core inflation,” which excludes energy and food costs, rather than “headline inflation,” which includes them. European economists, who favor headline inflation markers — and, by extension, believe that extremely high energy prices are a long-term phenomenon — are taking the Fed to task. Second, the Fed’s comments on inflation seem to confuse cause and effect .
9. Opening the discount window The argument: The Fed is placing a rare emphasis on it’s own lending capacity, known as the discount window, rather than the lending that occurs between banks in the private sector. The central bank has decreased the rate it charges on direct loans by 1.5 percent since September, while lowering its target for loans between other banks by only one percent. In December it also established a special mechanism, known as the Term Action Facility, for discount window auctions, and at least two auctions will occur through it in January. The first couple auctions at the end of last year were quite successful, but a heavy reliance on discount window operations does not have any real precedent. No one can predict whether it will be successful. In addition, the Fed is still working out several kinks that have made this type of lending undesirable in the past. Now might not be the best time for experimentation.
10. The Austrian take The argument: No survey of criticisms directed at the Fed can be complete without mention of the seemingly radical argument that the Fed should not exist at all. Proponents of this view, most of whom come from the “Austrian School” of economics, believe the very basis of current monetary policy is flawed. They think all dollars should be backed by an asset like gold, as they theoretically were until as recently as the ’70s, or at least exist in the reserves of banks. The “fractional reserve” system the Fed now oversees, in which only a small amount of the money supply can readily be withdrawn from banks, causes an artificial business cycle of “booms” and “busts.” The most prominent Fed abolitionist these days is Presidential candidate Ron Paul, who squarely blames the existence of the Fed for the economic events of recent months.

Don’t worry – It’s nothing to be ashamed about. In fact we intend to feed your addiction by providing you with the top free online TV channels for finance junkies. Did you know that you can find many sites which will provide you with free news clips, in-depth reports, and current events online for free?

Pretty exciting, huh? Now you can flip channels on your regular TV (or just buy two TVs), read the WSJ, and flip between internet channels. The possibilities are endless in your quest for the latest and greatest financial news.

Well, here they are (in no particular order) – the top 20 free online TV channels for finance junkies:

Major Business Publications

Many of the major business publications have began to broadcast their news on free internet TV channels. These are names that you will definitely recognize and be pleasantly surprised that they are offering online broadcasts.

1. Bloomberg TV – This site offers television channels categorized into 3 main regions: Americas, Asia, and Europe. Typical programming for the day in the Americas region includes a popular Morning Call show from 6:00 AM to 8:00 AM along with updates and features throughout the day.
2. Forbes TV - Great market and investment advice with the same quality which you would expect from Forbes. Choose from many different finance topics.
3. Reuters News - Reuters provide video news for almost every topic, including finance. Select the “Business” tab from the menu and choose from many interesting programs.
4. Business Week - Business Week’s online news room focuses on all current events related to the business world. Good site to get an overview of financial news.
5. Dow Jones Video - The Dow Jones sponsored channels offers content in the categories of News/Analysis, Investing, Pursuits, and Most Popular. Dow Jones provides a wide selection of programming and topics.

Regular TV Meets Online TV

Traditional television stations are starting to realize that a big market exists for providing programming online. Here are some channels/programs which can now be found on the internet.

6. CNBC – Have you ever wished that you could watch CNBC as you’re sitting in your favorite coffee shop from your laptop? Well you can find CNBC on sites such as MyEasyTV.com along with programs on demand from CNBC’s main site.
7. BBC Business – Crave international business news? BBC News 24 (BBC’s famous business channel) is available from BBC’s Business Homepage and just select the “Watch Live BBC News 24” link from the top of the page.
8. CNN Money - Regularly updated videos from CNN Money covering a wide variety of business topics and news.
9. Fox Business Now - Fox News is now available on the internet. You can select from a wide range of online video financial reports and content.
10. Nightly Business Report - Nightly Business Report covers the most important business and financial news stories of the day. Watch each evening’s broadcast online after it airs.
11. Weekly Market Monitor - Every Friday, Nightly Business Report anchor Paul Kangas interviews noted market observers about the investment climate and gets their specific stock recommendations.
12. Weekly Street Critique - Every Wednesday, NBR Anchor Paul Kangas interviews leading market strategists and financial experts about market movements and gets their investment recommendations.

Online Specials

Some of the free TV channels are exclusively available on the internet. Such internet TV hubs as ChannelChooser, MyEasyTV, and others offer their own content along with distributing other internet-only media. The following are found exclusively on the internet.

13. About Finances TV - a daily updated report on the latest events and market rankings of the New York Stock Exchange. It presents daily video reports on the stock-market, financial news and interviews of the Chief Executive Officers who are driving innovation in their industry or sector.
14. Business Focus TV – regularly updated feed from Reuters that covers the latest updates in Business and Stock related news. Look for it in the Business section at MyEasyTV.
15. Business Update TV – Powered by Reuters, this channel features up-to-the minute business information and features. Look for it in the news section of ChannelChooser.
16. Market News First - Site dedicated to small cap markets. Topics include Forex, Currencies, and Market movers. Great for the hardcore finance junkie.
17. Business News Network - Feature shows include Market Call Tonight, The Business News, Stars & Dogs, and Taking Stock. These programs provide a wealth of finance knowledge.
18. Forex TV - – Does your particular finance addiction center around the Forex market? If so, Forex TV is a must. This channel is dedicated to all things Forex and provides good news and information.
19. Zoomin – Great source for all-around news, including business stories.
20. ExpertsOnline – The Business TV Channel - Provides good information for small business finance junkies with advice and pertinent content.

So, are you intrigued with the possibility of getting free business news on your computer? As a finance junkie you can never get enough. Set up your favorites for the above channels, and you can start your virtual channel surfing in addition to your regular TV endeavors.

The world of finance revolves around being informed. The growing number of free online business channels will help you to stay ahead of the market and make good decisions based on up-to-the minute news. Use these channels to start exploring the world of internet TV now!