NEW YORK (CNNMoney) — For CEO Alan Mulally was paid more than $26.5 million dollars in 2010, according to documents filed Friday with the Securities and Exchange Commission.

Mulally’s pay package included a $1.4 million base salary, and a cash bonus worth more than $9 million, as well as a raft of stock incentives.

The eye-popping numbers are likely to be a thorn in management’s side later this year when labor negotiations begin in earnest.

Mulally has overseen a tremendous turnaround for the automaker — both in terms of stock price and profit. Earlier today, Ford announced it had topped rival General Motors in U.S. sales in March, grabbing the No. 1 spot for the first time in nearly 13 years.

In 2010, the company reported $6.6 billion in net income.

But union negotiations loom on the horizon.

In March, Ford made waves when it disclosed Mulally had been granted a slew of stock options that covered more than one year, to the tune of $33.4 million after taxes.

It’s hard to deny the company’s recent success. But is Mulally paid too much?

United Auto Workers President Bob King seems to think so. King went on the attack against the lucrative pay package in March, saying it was “morally wrong.”

The current union contracts with Ford, GM and Chrysler all expire Sept. 14.

King wouldn’t get into details about the union’s goals for upcoming negotiations, other than to say it wants to restore some of the concessions made during the crisis four years ago, along with other concessions it made in the intervening years. 

When offering forecasts for 2011, I feel like I can just take the stock phrase “______ is due for a correction” and apply it to one of any number of currencies. But let’s face it: 2009 – 2010 were banner years for commodity currencies and emerging market currencies, as investors shook off the credit crisis and piled back into risky assets. As a result, a widespread correction might be just what the doctor ordered, starting with the Australian Dollar.

By any measure, the Aussie was a standout in the forex markets in 2010. After getting off to a slow start, it rose a whopping 25% against the US Dollar, and breached parity (1:1) for the first time since it was launched in 1983. Just like with every currency, there is a narrative that can be used to explain the Aussie’s rise. High interest rates. Strong economic growth. In the end, though, it comes down to commodities.

If you chart the recent performance of the Australian Dollar, you will notice that it almost perfectly tracks the movement of commodities prices. (In fact, if not for the fact that commodities are more volatile than currencies, the two charts might line up perfectly!) By no coincidence, the structure of Australia’s economy is increasingly tilted towards the extraction, processing, and export of raw materials. As prices for these commodities have risen (tripling over the last decade), so, too, has demand for Australian currency.

To take this line of reasoning one step further, China represents the primary market for Australian commodities. “China, according to the Reserve Bank of Australia, accounts for around two-thirds of world iron ore demand, about one-third of aluminium ore demand and more than 45 per cent of global demand for coal.” In other words, saying that the Australian Dollar closely mirrors commodities prices is really an indirect way of saying that the Australian Dollar is simply a function of Chinese economic growth.

Going forward, there are many analysts who are trying to forecast the Aussie based on interest rates and risk appetite and the impact of this fall’s catastrophic floods. (For the record, the former will gradually rise from the current level of 4.75%, and the latter will shave .5% or so from Australian GDP, while it’s unclear to what extent the EU sovereign debt crisis will curtail risk appetite…but this is all beside the point.) What we should be focusing on is commodity prices, and more importantly, the Chinese economy.

Chinese GDP probably grew 10% in 2010, exceeding both economists’ forecasts and the goals of Chinese policymakers. The concern, however, is that the Chinese economic steamer is now powering forward at an uncontrollable speed, leaving asset bubbles and inflation in its wake. The People’s Bank of China has begun to cautiously lift interest rates, raise reserve ratios, and tighten the supply of credit. This should gradually trickle down in the form of price stability and more sustainable growth.

Some analysts don’t expect the Chinese economic juggernaut to slow down: “While there is always a chance of a slowdown in China, the authorities there have proved remarkably adept at getting that economy going again should it falter.” But remember- the issue is not whether its economy will suddenly falter, but whether those same “authorities” will deliberately engineer a slowdown, in order to prevent consumer prices and asset prices from rising inexorably.

The impact on the Aussie would be devastating. “A recent study by Fitch concluded that if China’s growth falls to 5pc this year rather than the expected 10pc, global commodity prices would plunge by as much as 20pc.” [According to that same article, the number of hedge funds that is betting on a Chinese economic slowdown is increasing dramatically]. If the Aussie maintains its close correlation with commodity prices, then we can expect it to decline proportionately if/when China’s economy finally slows down.

NEW YORK (CNNMoney) — The number of Americans filing for bankruptcy in 2010 ticked up 9% over the previous year to more than 1.53 million, industry groups said Monday.

The number of consumers filing for bankruptcy has increased each year since 2005, when bankruptcy laws were revamped, according to the American Bankruptcy Institute and the National Bankruptcy Research Center.

The 2010 figure far outpaces the 1,407,788 total consumer filings that were recorded during 2009, a trend that the American Bankruptcy Institute attributes to high debt and a stagnant economy.

“The steady climb of consumer filings notwithstanding the 2005 bankruptcy law restrictions demonstrate that families continue to turn to bankruptcy as a result of high debt burdens and stagnant income growth,” ABI Executive Director Samuel Gerdano said in a statement.

December was a particularly bad month for consumers, with 118,146 total filings, an increase of 3% over November’s level. That increase may become typical.

“We expect that consumer filings will continue to rise in 2011,” Gerdano said. 

Quote of the day: “Be always at war with your vices, at peace with your neighbors, and let each new year find you a better man.” – Benjamin Franklin

EURUSD

Trading strategy: standing aside

Good morning. The euro is climbing higher before year end, recovering towards $1.34 at time of writing. The sustained break above 1.3250 is a clear bullish sign and next barrier stands into the 1.3450-1.3500 zone, which provided support in November and was a reversal point in December 14. Now that there are only a few hours left until 2011, I doubt there will be any significant moves, so we’ll see next week if the euro will be able to hold recent gains and threaten 1.35.

I’d like to take this opportunity to wish you all a happy and prosperous 2011! …and a nice Year End party!

© liviu for innerfx.com, a Forex Analysis blog, 2010. |
Article Source | Post tags: EURUSD

NEW YORK (CNNMoney) — 2010 was a year marked by uncertainty and volatility, to say the least.

Stocks got off to a good start in January but worries about European debt quickly deflated that early optimism. As the market got accustomed to these daily anxieties, and Greece managed to crawl out of its default hole, stocks started to crawl higher.

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The Dow Piano

Here’s what the market sounded like in 2010. Take a listen.

But a dour jobs report on July 2 sent stocks plunging to their lows for the year.

All was not lost. On Aug. 27, Fed Chairman Ben Bernanke’s mere hint of another stimulus put stocks on an upward trajectory for the rest of the year. But let’s not forget May 6, when the “Flash Crash” sent the Dow spiraling down almost 1,000 points in a matter of minutes.

Put bluntly, 2010 was a roller coaster ride, said David Kotok, chief investment officer at Cumberland Advisors — and the ride may not be over in 2011.

Europe’s debt problems remained an underlying theme throughout the year. And in the second half, commodities took center stage, with gold surging to record highs and oil topping $90 a barrel for the first time in two years.

“Extreme volatility and high uncertainty go together, and both are here to stay for a while longer,” Kotok said.

Jan. 4: Stocks start the year on a positive note, closing at 15-month highs. The Dow Jones industrial average (INDU) starts at 10,584; the S&P 500 (SPX) at 1,133; and the tech-heavy Nasdaq (COMP) at 2,308.

February: Worries about Europe reach a fever pitch. Investors fear Greece might default on its national debt and trigger a domino-effect of defaults in Portugal, Ireland, Italy and Spain. Concerns about Europe’s debt crisis underpin the market all year.

April 16: The Securities and Exchange Commission files charges against Goldman Sachs for allegedly defrauding investors in a sale of securities tied to subprime mortgages. Goldman (GS, Fortune 500) shares plummet 13%.

April 20: A deadly explosion on an offshore oil rig operated by BP sends oil gushing into the Gulf of Mexico. It takes five months to seal the leaking well. BP (BP) shares have struggled to make up their losses ever since, and ended the year down 27% from April 20.

April 23: Greece requests a $53-billion bailout. (Dow, S&P end at 19-month highs)

May 6: In one of the most gut-wrenching hours in Wall Street history, a glitch in automated trading, dubbed the “Flash Crash”, sends the Dow plunging almost 1,000 points before it recovers to close with a 348-point loss.

June 7: The euro closes at a four-year low of $1.192 as fears about the European debt crisis resurface. (Dow closes at a 7 month low)

July 2: Stocks plunged to 2010 lows in the aftermath of a weaker-than-expected June jobs report.

July 21: President Obama signs the Wall Street reform bill into law, enacting the most far-reaching financial overhaul since the Great Depression. Stocks slump after Fed chairman Ben Bernanke tells Congress that the outlook for the economy is “unusually uncertain.”

Aug. 27: In a speech in Jackson Hole, Wyo., Bernanke first hints that the Fed may initiate a second round of monetary stimulus, known as quantitative easing or QE2. (Dow surges 165 points)

Nov. 2: In the mid-term elections, Republicans win back the House. The shift in the balance in power is generally seen as a win for Wall Street.

Nov. 3: Fed unveils quantitative easing — a $600 billion bond-buying stimulus program. (Dow, Nasdaq at 2-year highs)

Dec. 17: President Obama signs the $858 billion tax cut deal into law.

Dec. 31: Stocks end the year on a high note. The Dow ends at 11,578, up 11% from the beginning of the year. The S&P 500 finishes at 1,258, up 13% for the year, and the Nasdaq rises 17% to end at 2,653. 

The last year caught a lot of people
off guard . The financial stories and trends that emerged in 2010 challenged the conventional wisdom about investing, spending and the economy. Whether these patterns represent a “new normal” or a return to historical norms, whether they are long-lasting or short-lived, they will shape our financial lives in the year to come.

SmartMoney took a closer look at six big changes in personal finance that took place over the last year and how they might affect investors and consumers in 2011 and beyond.

Next: The End of the 30-Year Bond Rally

Published December 31, 2010

Published December 30, 2010

Hello trader friends! Hope everyone is enjoying the holiday season. Anyway, here are the global economic releases for the last week of 2010. May the New Year bring in some more success in our trading. Good luck!

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