LONDON, England– Another beautiful sunny morning and I'm back in the City. It's a shame, but I'm not feeling nearly as bright as the weather. I was up very late reading through the course work and trying to get my head around the technicalities of trading. I also slept fitfully, dwelling upon what David Buik said yesterday about my needing to have money as one of my gods.
Am I heading for a fall?
Back in the classroom and Ryan O'Doherty at CMC Markets takes me through the process of placing a trade. I'm introduced to the order ticket and the spread, the difference between the price at which I can buy or sell. I'm shown how to calculate margin, which is effectively the deposit I have to put down in order to trade.
I'm also shown how to place stop and limit orders, both of which will get me out of trades at a pre-determined price, realizing my profits or limiting any loss. It's all beginning to make sense and I leave at lunchtime feeling much more optimistic.
Over at IG Index it's more of the same. The trading platforms look very different but do exactly the same thing. Order tickets, spreads, deposits, stops and limits. Yes, I think I’ve got it.
Before heading for home and another evening of course work I visit the London Metal Exchange, a global trading centre for the likes of aluminium, copper and zinc. The LME is the last open outcry trading pit in Europe. Traders have been yelling across its trading floors since 1877. As I arrive it's nearly 5pm and the markets are about to close. Traders are ramping up the noise and striking last minute deals. The hubbub is unbelievable.
It's amazing to watch but I should imagine that it's an incredibly stressful environment in which to work. Open cry trading requires a particular breed of person. It wouldn’t suit me and I thank my lucky stars that when I finally get to start trading I'll be in the quiet comfort of my own home office.
* How does Adrian Finighan fare in his career as a rookie trader? Watch Quest Means Business Monday to Friday: 1800 GMT London, 2000 CET, 0300 HK.
NEW YORK – Disgraced financier Bernie Madoff stood up in court in New York on Monday and told some of his victims that "I live in a tormented state for all the pain and suffering I created."
Miriam Siegman’s life has been turned upside down by Madoff’s crimes.
Facing them head on, he said he was sorry - but his words rang hollow.
Speaking to us just after the sentence was handed down, many victims said if Madoff was truly sorry he would have stopped years ago and owned up to his mistakes instead of living a life of luxury.
Others felt bitter that Madoff has not told prosecutors who else was involved and where any remaining money might be hidden.
Victims, who attended a rally after the hearing, are vowing to fight on.
But many acknowledge they will never recoup their life's savings.
One woman, Miriam Siegman teared up as she told how she now lives on food stamps.
She admitted she turned and walked out of the court room when Madoff gave his statement. It was simply too little, too late.
The 150 year sentence Madoff received was the maximum allowed and was based on several factors including the number of victims, the amount of money involved and the damage caused by his acts.
In delivering the sentence the judge said he understood the ruling was largely symbolic since, at age 71, anything over 15 years would likely mean life in jail for Madoff.
But Judge Denny Chin said he wanted to send a strong message to those who would think about perpetrating similar crimes.
This is by far one of the harshest sentences ever handed down for white collar crime in the U.S., but Madoff's crime was unprecedented and has badly damaged investor confidence.
What do you think? Did Madoff get what he deserved or is 150 years overkill? Did he act alone or will the government be successful in charging any accomplices? And will the harsh punishment deter others?
LONDON, England – A bright and sunny Monday morning and I’m off to work. But my morning commute today takes me not to my usual central London destination, but to the financial heart of the capital, the Square Mile. The City, where fortunes are made and lost. I feel strangely nervous, like the new boy at school.
At CMC Markets, market strategist Ryan O'Doherty introduces me to the concept of CFDs or Contract for Difference. A CFD would allow me to trade on a financial instrument such as a share or a commodity without having to physically own it. They are a leveraged product which requires a trader to deposit only a fraction of the overall value of their trade. This is called trading on margin.
Markets fall as well as rise. CFD traders can potentially profit from falling markets too because they are trading on the price movement of an instrument. This is known, Ryan explains, as "going long" if you expect the price to rise - or "short" if you expect it to fall.
Ryan is at pains to point out that while margin trading can magnify returns, losses will also be magnified, so CFDs aren’t suitable for everyone.
A couple of hours later and my head is buzzing. It seems incredibly complicated. Ryan gives me my coursework to read and sends me on my way. I stumble out into the sunshine wondering whether I'm up to this.
Fortified by coffee and a sandwich I'm welcomed into the offices of IG Index and another classroom where chief market strategist David Jones outlines the concept of spread betting. David explains that spread betting is very similar to trading CFDs but with certain tax advantages for UK citizens.
David then goes on to teach me about currency pairs, one of the most popular spread betting and CFD instruments. It’s the volatility of the currency market that makes it so attractive. Whereas stock markets can trade within a narrow range for days, currencies often present trading opportunities many times a day.
David points out that, as a leveraged product, the potential for losses as well as gains while spread betting is magnified. He says that due to the extreme volatility I might like to think about getting to know the currency markets well over time and gaining much more trading experience before venturing in.
More coursework to tuck into my briefcase and my school day is done.
Before joining the swarm of evening commuters streaming away from the city, I pop in to see David Buik of BGC Partner, a man I’ve interviewed hundreds of times on television over the years and someone whose expertise I value.
David has kindly offered to give me "independent" advice as I attempt to become a competent trader.
Sitting in his 19th floor office, admiring the view over the Thames, David drops a bombshell. "If money isn’t one of your gods, you’re wasting your time in this environment," he says.
You see, money never has been a great motivating factor in my life. Broadcast journalism is a vocation for me. I’m fortunate enough to have a fantastic employer who rewards me handsomely for what I do and I rarely give money a second thought. Sure, I'd like to have a bit of extra cash now and then - but who doesn't? Does this mean then that my attempt to become a successful trader is doomed from the start?
Perhaps it is. Perhaps I just haven't got the right attitude and never will. No time to worry about that now though. I've got several hours of coursework to get through before I can rest my weary bones.
* How does Adrian Finighan fare in his career as a rookie trader? Watch Quest Means Business Monday to Friday: 1800 GMT London, 2000 CET, 0300 HK.
LONDON, England – Just a decade ago, if I’d wanted to trade the markets I’d have had to engage the services of a stockbroker. I’d have been limited to trading, over the phone, UK and perhaps some US stocks. Every trade would have been subject to a hefty broker’s commission.
Can CNN’s Adrian Finighan cut it as a rookie trader?
Today, thanks to de-regulation and a high speed Internet connection, I can trade almost anything, anywhere in the world, from wherever I happen to be at the time. I can do it 24 hours a day - and it won’t cost me nearly as much as it would have done 10 years ago.
I’ve been a financial journalist for more than 15 years. Booms. Busts. Inflation. Deflation. Mergers. Acquisitions. Hostile takeovers. Profits. Losses. Interest rates. Bond yields. Bankruptcy and fraud. I’ve covered them all over the years and I’ve learned a lot about how the markets work.
But, despite having a ringside seat I’ve never actually dipped a toe in the water and tried to make money myself.
Actually I have.
Some years ago I stupidly listened to a colleague who fancied himself as an ‘expert’ and bought shares on his recommendation. They bombed within weeks and, embarrassed by the memory, I try my best never to think of it.
But lately, as the financial markets have suffered a major meltdown and the media has vilified bankers and their "greedy, risk-taking’" traders for helping to tip the global economy into recession, I’ve begun to wonder whether I could have done any better?
Of course, all of this is somewhat academic. I can’t answer those questions because while I know how the markets work, I know nothing of how to trade them. So, with a CNN camera crew for company, I decided to find out.
I became a Rookie Trader.
I’ll be detailing my experiences right here in this blog over the next few days.
The extra time needed to study all of the course work and additional reading material makes that impossible, as you’ll see when I go into detail later. And even now, course work and filming complete, I’m still little more than a novice with much still to learn.
* How does Adrian Finighan fare as a rookie trader? Watch Quest Means Business Monday to Friday: 1800 GMT London, 2000 CET, 0300 HK.
In 2005, I took a road trip through Iran. The sights – such as Yazd, the center of the endangered Zoroastrian religion, and the impressive mosques and madrassas of Esfahan – were some of the most fascinating I have ever seen.
Also fascinating was what we didn’t see: No McDonald's, no Starbucks or any other globe-trotting American brand.
Yet in the vacuum of Western products and services brought by financial sanctions against Iran, Asian companies have been eager to fill the void.
Ben Simpendorfer, author of "The New Silk Road: How a Rising Arab World is Turning Away from The West and Rediscovering China,” said trade between Asia and Iran has been surging since 2003. China accounts for half the increase. Railways, construction, and consumer goods firms, he says, have benefited in particular.
Trade sanctions – in place since the 1979 revolution against the Shah – have diverted Iranian trade away from the West and more to the East. The rising trade power of China and other Asian nations with Iran has weakened the effectiveness of sanctions, Simpendorfer said.
"Over the past couple of years, demand from the traditional markets – Europe and the United States – have collapsed," Simpendorfer explained. "So a lot of exporters in this region are now turning to the developing markets to try to find substitute buyers."
However, some exporters here are starting to face the same pressures as their Western counterparts. "Asian companies are increasingly finding it difficult to finance their trade with Iran," he said.
Chinese exporters, Simpendorfer said, "are suggesting that they should rely on telegraphic transfers, for example, or euro-denominated trade finance, or even look to try to divert their trade through Dubai as an alternative to directly exporting to Iran."
The current unrest makes the future difficult to read, but Simpendorfer believes no matter the outcome, Iran’s economic ties with Asia are bound to rise.
NEW YORK - “I’m at a point in my life where I was not opening envelopes ... I was not looking at stuff and I need to make a decision to be active in my life.”
Sound familiar? It did to me. The quote is from a woman attending a seminar I sat in on as part of our Road to Recovery coverage.
Each week about 30 women gather to participate in a class that is designed to help them regain control of their financial lives. It is a bit like weight watchers, but in this case they are counting coins, not calories.
As I listened to their stories, I felt an immediate connection. I also have a pile of statements about my retirement funds that I have been too busy – and secretly too stressed – to look at!
It turns out that many of us are carrying around the dirty secret that we are not nearly as informed about our finances as we should ... or certainly could be.
Gallia Icon is out to change that. A personal finance advisor, she and her co-instructor M.P. Dunleavy started these weekly money classes to help give women a basic education in personal finance.
The courses, which last for 12 weeks, are set-up like a support group – complete with weekly check-ins. The women set concrete goals at the start of the course and then give updates each week on the progress they are making.
The dozen or so ladies we visited came from very different backgrounds but they had one thing in common: For too long they had let other people make decisions about their money.
"Women, in particular, do not make money a priority and tend to let partners handle much of the responsibility. If they are taking care of the household finances it is usually rushed at 10 p.m. at night after they are done working and have put the kids down for the night," says Gichon.
The classes cover everything from understanding mutual funds to saving strategies to wills and life insurance. In the sessions no question is off limits. Participants say the female-only format helps keep the conversation free and open.
I went in not knowing what to expect, but I left inspired. After putting up pretenses for years, these women were ready to bare all. They asked detailed questions and offered each other support and information.
After just a couple of classes, many had already made big changes. One woman had started reviewing her retirement program at work and making changes to her fund allocation. Another had paid down debt and was ready to invest for the first time.
And – my favorite – had moved all her information online and was getting ready to sack her current adviser whom she felt had always talked down to her!
In this tough economy it is easy to ignore this part of life and hope the problems just go away, but they rarely do. These women show that with a little instruction and the support of your peers you can regain control and banish that nagging voice that has been telling you could do better when it comes to your money.
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