NY Forex Scam Busted! $240,000 Fine.

NY Forex Scam Busted! $240,000 Fine.

Yet another Forex Scam busted. Apparently Michael Vitebsky, a resident of NY state was conducing an illegal foreign currency operation. He has been permanently banned against trading and registering with the Forex market. Keep reading for full details!

New York Court Enters Order Imposing a $240,000 Fine and Other Sanctions against New York State Resident Michael Vitebsky in a Foreign Currency Scam

Release: 5646-09
For Release: April 9, 2009

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it obtained $240,000 in sanctions and a permanent injunction in a consent order against Michael Vitebsky, a resident of New York State, in connection with his participation in an illegal foreign currency (forex) boiler room operation and for violating the anti-fraud provisions of the Commodity Exchange Act. The order also imposes permanent trading and registration bans on Vitebsky.

Vitebsky is obligated to pay the $240,000 civil monetary penalty upon satisfaction of a $220,000 forfeiture obligation entered in a parallel criminal proceeding, U.S. v. Vitebsky, E.D.N.Y. Docket No. 04 Cr. 0419.

The order was entered by Judge Leo I. Glasser of the U.S. District Court for the Eastern District of New York and stems from a CFTC complaint filed in 2003 (see CFTC News Release, 4852-03, October 16, 2003). The order enters findings of fact that Vitebsky and others participated in a scheme in which Vitebsky used A.S. Templeton Group, Inc., a company of which he was the president and treasurer, to fraudulently solicit funds from customers for forex transactions. According to the order, Vitebsky helped divert customer funds for unauthorized purposes and willfully made false representations to customers regarding the profitability of their accounts.

The CFTC would like to thank the U.S. Attorney’s Office for the Eastern District of New York for their assistance.

The following CFTC staff members are responsible for this case: Sheila Marhamati, Philip Rix, Steven Ringer, Lenel Hickson, Jr., and Vincent McGonagle.

Forex Profit Accelerator Contest Winner

Forex Profit Accelerator Contest Winner Speaks out

I would like to give my thanks to Scott for writing back to us and to share a little of how he won Forex Profit Accelerator.

Hello Forex Mastery Blog,

I think it is time to write back to you and say thank you for helping me in winning one of the Forex Profit Accelerator courses.  This is the process that took place.

I have been receiving a lot of Bill Poulos material over the last year or so for his trading courses.  I have also been looking for an end of day type method of which Bill likes to trade with.  So I went and “Google” Bill’s name and came across the Forex Mastery Blog website and that is how I found the PDF guide with information on how to win the FPA course.  I read the guide and used the information and keywords that you offered in writing my story.  I also went to Bill’s PDF from the Forex 4-Pack, which also gave some great information on what I thought he was looking for.  I then combined the two resources and a few days later I found out that I won.  I was totally stunned and excited about winning a FPA course.  I was one of 1800 people who submitted entries and won, totally amazing if I say so.

I don’t think it would have been possible without Forex Mastery’s help.  With that I just want to say Thank You very much. I also want to thank Bill Poulos and his organization for giving me this opportunity to study and use his course.

So there you have it, thanks to Forex Mastery Blog, I am a contest winner and member of FMB!

Sincerely,

Scott C.

(Email and Location withheld for privacy)

US Payrolls Plunge By 663K; Unemployment At 8.5%

US Payrolls Plunge By 663K; Unemployment At 8.5%

The jobs in the U.S. continue to drop in March, pushing total losses past five million jobs since the recession started 16 months ago.

 The unemployment figures are a sober reality check on the economy, bringing us back down a bit after some mildly good news on housing, automobiles and manufacturing. If jobs continue to be lost at their current pace, nervous consumers will be more likely to avoid buying big-ticket items, instead hording what little money there is and only buying essentials. But purchasing big ticket items and non-essentials is what usually propels recoveries, and avoiding this could keep us in financial difficulties for some time to come.

March Employment Report

	Mar	Feb
Payrolls	-663K	-651K
Unemployment Rate	8.5%	8.1%
Hourly Earnings	$18.50	$18.47
Consensus:
Payrolls: -673K
Actual: -663K

Nonfarm payrolls dropped 663,000 in March, the U.S. Labor Department said today, largely matching Wall Street expectations, according to a Dow Jones Newswires survey. However, January was revised to show a steeper loss of 741,000.

January's drop is the third largest on record. The first was a two million job plunge in 1945 and the second was a drop of 834,000 in 1949, and these two were driven by single events including a massive coal and steel strike and the end of World War II. This is not the case this time.

Since the recession started in December 2007, the economy has shed 5.1 million jobs, with over two million of those losses in the past three months alone, essentially this year.

Keith Hall, Commissioner of the Bureau of Labor Statistics said, "These declines have been widespread across industry sectors, but particularly sharp in manufacturing, construction, and temporary help services."

Layoffs announcements continued last month across sectors including: United Technologies Corp. (UTX); General Dynamics Corp. (GD); National Semiconductor Corp. (NSM); and Wal-Mart Stores Inc. (WMT).

The unemployment rate, which is calculated using a survey of households as opposed to companies, jumped 0.4 percentage points to 8.5%, the highest since November 1983. In its latest report on the U.S. economy, the Organization for Economic Cooperation and Development said it expects the jobless rate to reach 10.5% by the end of next year.

Average hourly earnings increased a modest $0.03, or 0.2%, to $18.50. That was up just 3.4% from one year ago, a sign that inflation isn't a threat.

To be sure, the severe first-quarter payroll drop doesn't mean the economy can't find its footing later this year, since employment has lagged the last couple of recoveries. Indeed, consumer spending -- which accounts for about 70% of gross domestic product -- likely expanded last quarter despite the loss of two-million-plus jobs.

But if that pace doesn't decelerate noticeably by the middle of the year, then hopes for even a modest recovery this year would increasingly look out of reach.

According to Friday's report, hiring last month in goods-producing industries fell by 305,000. Within this group, manufacturing firms cut 161,000 jobs, bringing the total since the recession began to 1.5 million.

Construction employment: -126,000

Service-sector employment: -358,000.

• Business and professional services companies: -133,000

• Financial-sector payrolls: -43,000.

Retail trade: -47,800 jobs

Leisure and hospitality businesses: -40,000 as households cut back on discretionary spending.

Temporary employment (a leading indicator of future job prospects): -70,000+.

Health care payrolls : +13,500. (The sole bright spot among private sector industries was health care, which tends to be more labor intensive than manufacturing and other services)

The government shed 5,000 jobs last month due to cutbacks in state and local payrolls.

March Non Farm Employment Report Tomorrow

March NFP—Consensus Estimate -670,000 to -650,000 Loss in Payroll Jobs
Release time:  Friday, April 3, 2009 – 8:30 AM ET

Employment is widely believed to be a lagging indicator, so traders often look to wider economic announcements to try and gauge overall economic sentiment.    However, traders continue to be assailed by good, bad and “less bad” news announcements from all sides and making sense of the markets at the moment may prove to be difficult.  The bad news is highlighted by the ADP report, “less bad” includes the February sales reports from GM and Ford and the decreasing speed of the rate of decline of the Case-Schiller’s index, and the ISM report falls in the good category.   Another important potential equity market mover to track will be the Financial Accounting Standards Board (FASB)’s vote on the major changes proposed in the mark-to-market rules.  

ADP’s report increased analysts worry about economic expectations being overly optimistic.  The national employment report released on Wednesday caused a stir when it announced that private sector employers cut 742,000 jobs from payrolls in March and revised the February job loss figures upward from 697,000 to 706,000.  Despite headlines to the contrary, ADP reported that the largest number of job losses did not come from large employers.  Joel Prakken, chairman of Macroeconomic Advisors LLC stated, “Despite some recent indications that stock prices, consumer spending, and housing activity may be bottoming, employment, which usually trails overall economic activity, is likely to remain very weak for at least several more months.”

In contrast, the recent US manufacturing activity release appears to show a potential slowing of the contraction.  The manufacturing output shrank again in March, for the 14th consecutive month, but the ISM index rose from 35.8 to 36.3.  That is slightly more that many economists were expecting and the sub-index for new factory orders rose to the highest level since August last year, giving stock markets a little boost on Wednesday.  
 
Though the US housing market continues to decline, Robert Shiller, co-creator of the Case-Shiller index and a professor of economics at Yale University offers a small ray of hope.  The decreasing speed of the rate of decline is something to monitor.  But, he added. “I don’t read too much into it yet.”   Other housing price indices have been offering some positive indications for home price stability as well.  The National Association of Realtors’ initial estimates of home prices in February showed prices remaining virtually unchanged from January to February, after falling 15.5 percent on the year.  

For week ending March 28, the Labor Department reported that the advance figure for seasonally adjusted initial claims was 669,000, an increase of 12,000 from the previous week’s revised figure of 657,000.  They also reported a four-week moving average of 656,750, an increase of 6,500 from the previous week’s revised average of 650,250.  The number of long-term unemployed has increased 270,000 to 2.9 million and the number of persons who worked part-time for economic reasons jumped 787,000 to 8.6 million.  When you add the increase in the number of discouraged workers (up 335,000 from a year ago) and it all adds up to underscore the difficulty of finding a new job in the current employment environment.   

This Friday’s news releases are expected to deliver more bad news.  
-    Experts and analysts are predicting a loss of 650,000 to 670,000 jobs  
-    The average work week is expected to hold steady at 33.3  
-    The unemployment rate is expected to rise to 8.5%, from 8.1%
-    The rising unemployment rate and high level of nonfarm payroll declines (their highest in February since Oct 1949) are expected to keep consumer spending low which drives GDP.

 

What is the NFP report?

Of all the world monthly economic reports, the monthly U.S. Non Farm Report (NFP) is the most highly anticipated and has the most dramatic impact on the currency market.  

The report, which is released on the first Friday of each month and states the previous month’s numbers, provides detailed industry data on employment, hours and earnings of workers on nonfarm payrolls. In our opinion, these numbers are the best way to gauge the current state of the US market as well as the direction that the economy is heading.  

What’s more, the employment numbers provided by the report are used by the Fed to shape their interest rate policies.  The health of the U.S. economy and interest rates translate to the strength or weakness of the U.S. dollar.

Risks Associated with Trading Off-Exchange Retail Foreign Currency During Economic News Announcements

As with all major economic releases, there could be significant price volatility with this announcement.  Currency spreads will typically widen just before the release and will remain wide for a few minutes after.  If the announcement is a shock to the consensus estimate, the price of the currency pair could gap significantly.  For example, the price on the EURUSD trading at 1.2820 - 1.2822 just before release could gap up 60 pips to 1.2880 - 1.2882, without any available prices available between the price of 1.2820 and 1.2882.  A Buy Stop placed before the announcement at 1.2830 would turn into a Market Order and would be filled at the prevailing price 1.2882.  The same would be true with a Sell Stop.

Approximately four years ago we saw a gap of approximately 200 pips on the GBPUSD on a Non-Farm Payroll announcement.  While this is an extreme example, it nevertheless is a possibility with trading during economic announcements.  Consequently, plan on the spreads widening and, if you are trading with a Buy or a Sell Stop entry order, do not anticipate being filled at your entry price. You will be filled at the prevailing market price after the release, which could be significantly different from your desired price of your entry order.