Binary Options Insider

Your stupidity is just part of your human nature. Rise above it.

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Binary-Option-Robot Rami Nasri Scam Video

A colleague sent me this video. The “Anonymous” did not spare the owner Rami Nasri, and for a good cause IMO. I have heard of this guy’s escapades and threats to people around the industry. This is not something you do not expect nor something you do in any business. The word gets out and you get shut out. It does not take long and everyone knows you do not want to provide better service but threaten people to get ahead of the competition. 

Now, this guy had a well-known product (not to be mixed with BinaryOptionRobot.com, which is a different product I covered briefly in the last similar fight of the robots in binary) he could use to offer better service than other. Then he threatened guys from the Binary Options Watchdog and I guess many others and now his name is across the YouTube. 

With this kind of guy at the helm, you would want to avoid his products if you are a binary trader. If this is how he treats review sites, imagine how he treats customers.

It's best to avoid Rami Nasri & Binary-Option-Robot.com

I can recognize some of his white label buyers in www.optionrobot.com so you may want to avoid that service too, along with binary-option-robot.com.

If you are a partner, you might want to do the same thing or you will end up threatening people you don’t know.

So, am I calling Rami Nasri’s rage upon me? Probably, just hope Banc De Binary guys don’t come knocking on my door because I mostly think of them as nice people and a very good binary brand. Their lawyers will probably have a talk with mr. Nasri over this. 

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Google News Hacking and Binary Options Scams

I have subscribed for Google news alerts daily for “binary options” and “binary robots” and I must say I am really overwhelmed by how Google ineffectively removes hacked websites even after the anti-hacked websites update in January. While there are numerous binary scams out there, it seems that Google itself is now helping them directly target people via e-mail.

What is the “news trough hacked websites issue” about?

Well, obviously, some websites get hacked and they have some authority at google, being mostly sites of government offices or industry associations. So their binary options related pages that have been planted by hackers end up in the Google news and in inboxes of potential customers. 

Those who end up as customers are biased to idiotic easy money messages, however, it does not mean they deserve it. I have actually signed up with one of these services. I see nothing there but a look to probably leave your e-mail and get spam emails, in my case, from an athletic star, Matilda Raynolds, letting me know in 3 e-mails at a time that there are some mysterious profits out there. 

No, not that one, this fake one:

So what else do they offer?

Wooow awesome!

The real possibility is that the fake Matilda Raynolds is actually earning $1200 a day trough this scheme. I can actually believe that. So this is why I am writing about this. Stay away from anyone promising easy money. It may be easy to trade - technically, however, strategy wise, it can be really hard and not everyone is ready to be successful in a way that will earn him/her enough to be happy. 

People are actually never happy I guess, this is one of the reasons these scams are possible. Other reasons are being desperate or just not thinking clearly.

Keep your money safe!

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by The Tasteless Gentlemen (FB)

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FBO Survey Shows Traders Want Signals

I have just gotten a newsletter from FairBinaryOptions.com .

They have conducted a survey among their 5000 or something subscribers about what they wanted to see on their website more. Survey was very short, I have filled it in myself. At first, I was a bit disappointed there weren’t more questions, but one must ask, who is answering mailers anymore, so the fact that they got enough answers to complete it is better than having a long survey no one answered. 

See the responses in picture below:

So, most people are in binary options for “money and investments”. While this can mean a lot of things, I do see it as a belief that they are after profits. I just hope they understand these are not easy to achieve. Many people lay down much money without ever trying to improve their trading technique. 

Other answers were “improve skills or something like that” and “fun”. I have picked fun since I see it that way. 

The question about what people are interested in binary options was predominantly answered “signals”. I see it as tightly connected to the first set of answers. If traders are interested in profits, it's easy to see why they would want more signals info. It's a good way to offload some of that technical analysis on experts.

Fair Binary Options offers free signals. One every day. While this is not enough to make a huge difference. If they achieve nice win rates, it may be a good deal. Getting a newsletter twice a month for a daily free signal is not so bad. 

Well, it really is not since most customers want signals to be delivered by mail, daily, if the survey results are to be trusted. I understand this. Many want notification the signal has arrived in order to immediately implement it if needed.

[binarytradinginsider-blog]

Fed Rate Hike a Non-Event

25bp

So, the Federal reserve finally raised rates. While I am not fully onboard with the decision and think it may have been just a little premature, the markets have taken it well. we did not see any marked deterioation, so Im pretty convinced this will not hurt the economy. I am worried about low long term inflation expectations. 

FT reports:

Equity markets rose across the world following the move. A positive session in the US fed through to Europe and Asia, sending the FTSE 100 1.5 per cent higher and the Nikkei 225 up 1.6 per cent. Financial stocks led the way, with HSBC adding 2 per cent and BNP Paribas advancing 1.9 per cent. Even in emerging markets, which are expected to face capital outflows as investors seek higher yields as the Fed pushes rates higher, investors took the widely expected US rate rise in their stride. The dollar continued to strengthen against most other currencies, with the dollar index up 0.9 per cent to 98.77, less than 2 per cent shy of a 12-year high. Against the dollar, the euro slipped 0.5 per cent to $1.0855.

There is a simple text on Medium showing why the rate hike was more of a media event than an market event. It was written before the hike.

Those who were betting on disruption and volatility got it wrong. However, there were some opportunites for taking positions and benefiting from the move.

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The Perils of Perception in 2015: Ipsos MORI from Ipsos MORI

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Yes, Draghi did disappoint

Yesterday’s ECB press conference did not go well for those who bought into Goldman’s EURUSD 1.03 claim. Markets fell, Euro appreciated as ECB announced a small cut in the deposit rate and extension of the QE programme. Expectations have been set high, but to be frank, 99% of central banks’ work is setting expectations on the future policy path depending on the economic outlook. 

Target the forecast!!!

If the projections are being changed, the central bank needs to commit to hitting the target. It can only do so by promising more action. So, what should have Draghi done?

Draghi promised to do “what we must”  to reach the inflation goal as soon as possible. Markets have taken the statement with the understanding that the monetary policy will be set in a way that will enable inflation to move back up faster. 5year over 5year inflation swaps indicating inflation expectations reached 1.8% signaling Draghi’s words managed to convince them that the action will be strong enough to move the price increases rate up.

Financial markets knew “what they had to do”. For them, it meant increasing the monthly pace of purchases and probably a deeper deposit rate cut. Postponing the length of the programme obviously was not seen as a crucial step in achieving the desired rate of inflation as “soon as possible”.

Draghi did not do what was needed to hit the goal

When ECB underdelivered, it was obvious that inflation will not move faster to the target. How do we know? Well, markets told us. Markets are the policy. While succeeding in loosening up the policy with his statement, Draghi failed when delivering the needed change in the instruments, effectively tightening the policy relative to the previous stance.

Financial markets can show where the policy needs to be. All central bankers need to do is listen. If you manage to move market-based inflation expectations you will probably move the inflation too. If you move stocks and commodities, you are moving the expected incomes. This also has positive effects at the current nominal incomes/expenditures. 

So, financial markets may have expected too much, but, it was in line with Mario Draghi’s self-proclaimed goal. In order to achieve what he hoped for, he should have listened to the market.

ECB Governing council members do not seem to understand this. 

ECB president says QE `recalibration' enough to revive prices Says aim was to reach inflation mandate, not satisfy markets

Financial markets beg to differ. The 5y5y inflation swaps implied inflation fell on the news as did other markets. ECB’s track record with projections is not that good either. The postponement is the norm. Markets know better, Draghi should know it's not about appeasing the market but trusting its forecast. They have the skin in the game after all.

[binarytradinginsider-blog]

Meet the Central Bank Governor Who Isn't Much Impressed by Money

When Patrick Njoroge took charge of the Central Bank of Kenya six months ago, his biggest surprise wasn’t how tough the job turned out to be. It was the attention on his personal life.

No central banker should be impressed by money. Their job is to make money invisible, unimportant.

[binarytradinginsider-blog]

Kisha Umbrella+App

Ok, this is cool. I just found out about this Kisha Umbrella. It has inbuilt tech that enables you to know when to take it from home. I don't actually like umbrellas, however, this one also has a way to place a pin on a map of the last location. This is extremely useful for me. price could be lower and $20 for the hypno look that I want are a bit too much, but I will get this by the end of the year.

[binarytradinginsider-blog]

Mikes Auto Trader  Binary Option Robot Scam Bitchslapping

Low transparency and ability to verify results, causes funny catfights between robots sometimes. Most recently, Mike, the guy from auto trading software Mike’s Auto Trader accused his competitors (BinaryOptionRobot.com and Binary-Option-Robot.com of being scams. He used customer e-mails and screenshots from the BinaryOptionRobot website to prove his point.

How annoying are these guys?

While Mike does not look like that douchy guy with the stick, there is something about videos with people in it (especially guys with ponytails) that I find repelling. Why do I need to see you, and why do you just keep blabbering. 

Binary Option Robot’s “Brian” cannot be seen, but it tends to be highly frustrating to hear him every time you visit the website. 

The idea behind the video is to tell the story in a better way than one can do with a website. Stories are very important in the way humans think and make a decision. We are often prone to accepting a story that sounds good to us even when the facts and mechanics behind the process designating the story may be totally different and we are probably wrong to accept the story. These framing effects are very important. The longer you watch the video, the longer it makes sense. Mike does this well while Brian is too technical.

Disclaimers Risks Bitchslapping

Before I go trough all the claims Mike throws out there, let me just state several things. Auto trading websites are most of the time unrealistic in terms of win rates they claim. This is nothing new, past win rates are not a guarantee to future returns. Even Mike’s T&Cs state this. Mike is also making some claims about returns in the video, however, T&C state these are not guaranteed. 

No broker would work with an auto trading robot if those positions where they had to enter the other side of the trade have a low likelihood of ending in their favor. Market liquidity would disappear fast.

Other concerns are related to the fact that, following the Efficient Market Hypothesis, it is impossible to beat the market consistently, in the long run. So, if you see someone showing their past win rates as not very volatile and always in the high range, you can be sure they are sugar coating the results.

So, when you see one auto trader going after another one, it is funny, since they are both engaged in a similar scheme when advertising. 

Mikes website does not even publish results. That is fine, however, one asks how you can verify his claims? Trough testimonial in screenshots. Hm, not a fan considering I have encountered cases where testimonial where pictures next to them were soap opera actors from Uruguay. 

BinaryOptionRobot does publish results, signal by signal and broker by a broker so, while this is certainly welcome practice and less scammy, it can be confusing for traders. I did see materials where BianryOptionRobot claimed some success rates that were pretty high, but as I remember, these were related to the testing period. When the number of signals increased, rates started to behave as expected - volatile and somewhat lower in average.

In any case, both are better than some other services in terms of (non)transparency, however, I would give a few points more to the BinaryOptionRobot on this one. But that is not the issue here.

Mikes Auto Trader vs Binary Option Robot

Talk about two monkeys throwing feces at each other. Did he have a case here? Yes, he did!

Look at all the evidence provided

screenshot of results from BinaryOptionRobot webpage

emails from traders who used the service 

Well, this seems legit. However, IMO it's just cherrypicking. 

Screenshots of results

He could have done this because BianryOptionRobot publishes results so screenshots are possible. In every business, you will have a distribution of customers who done well and other who did well at each point in time. Check out these two screenshots I took from the BinaryOptionRobot list.

This one is all losses! What?

Look at this one- not bad

So, which one is true? For you as the trader, the high probability is that none is. But you may be closer to one of the two, however. As mentioned in Mike’s T&Cs above, you may score as much as stated in advertising or less or even lose everything. So these things are ok according to him.

If it is ok for him, why is not ok for his competitor to be rated by the same set of standards. 

E-Mails

The same deal as above, you always have people who are complaining, and they will always be louder than others. The point is that not the whole population of traders is researched and never will be in this case. So Mike is simply telling another story and our brains like this.

Kahneman on storytelling:

 It is impossible unless a less complicated system is developed, where only a certain set of signals is traded, always with the same broker, and without any customization or delays in trading. 

So, these e-mails are as credible as Mike’s testimonials on the site. It may be cherrypicking, it may be completely false. In any case, we are certain these are individual experiences. 

Check this quote from Kahneman’s “Thinking fast, slow” to see how overconfidence in our own stories is created.

And what about Mike’s intentions?

In any case, I do not think it is ok to attack competition this way. You provide a better service and draw people to it by creating a good service. 

If you are smearing shite around, I would first think you are doing this for all the wrong reason - not because of customer’s well-being, but because of the fact that you just can’t take on your competition. 

And this is ok, traders are guilty if their bias-prone minds are not able to think about intentions behind the whole thing. 

They look for nicer framing and nicer story. Advertisers live off these kinds of reasoning mistakes (the 20:80 rule, anyone?)

It's ok to be stupid, but it is not ok to be lame

I don’t really care which one of these two auto traders is better, in my position, I can earn from sending traffic to both (not from this blog - here I do not use tracking links). 

But this way of engaging your competition where there are strong theoretical reasons and empirical evidence that neither of you can achieve what you are trying to sell is douchy at best.

[binarytradinginsider-blog]

The researchers first asked the participants to rate their expertise in a particular area, personal finance for example, before being asked to rate their knowledge of a variety of specialist terms, some of which do not really exist, such as “pre-rated stocks, fixed-rate deduction and annualized credit.” The higher the people rated their own expertise in a particular area, the more likely the people were to claim to know all about the nonsense terms made up by the researchers.

Big Think

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How to select a binary auto trader

...or how to assess your risk and, more importantly, their bullshit. 

I do not know when was the last time I have seen so much hype in the binary options industry as with the arrival of various auto trading solutions. While in many ways this is a welcome development, for customers it seems to get even more confusing as various providers across the Internet use various systems and claim win rates that in the real world cannot be achieved consistently. 

Surviving the bullshit jungle

I have dealt with many of these auto trading providers and must say that really it is a jungle out there. There are several big providers that seem to own most of the market. There are also many incumbents and providers that have been popular once but have never caught up with the new swath of web-based services.

There are always those scammy sites that throw thousand of $$$’s in your face effectively claiming money is guaranteed. In essence, all of them are liars, as any other company engaging in advertising is. 

As I already wrote, they try to use our lack of information and our biases to steer our decision making. That is mostly ok if they are making us look the other way. If they are withholding information we need to make an informed decision, they are crossing those thin borders of ethical behaviour.

If you read my previous posts on stupidity - at least what you should have taken with you was the fact that there is no easy money. This is the level of stupidity I have hoped to eradicate with my writing and I think should be at least be base in order to objectively assess a service you are interested in. 

So, if there is no easy money, why should I trust binary options auto trading services such as the Binary Option Robot,  Binary Auto Trader, or that website with an hour long video explaining “how can you make money using a stick”. 

Look at that douche with the stick! 

Should you trust this guy?

You should not - you should be able to read trough the bullshit and find a service that will provide you with realistic return rates, or at least advertise win rate that is closest to real life. Sometimes, that will mean overriding your instinct to go after that amazing weekly income that is being promised.

So, where is the catch with binary robots?

The catch is all in your head. Traders should be able to distinguish clever marketing from idiotic (it would be better to call it “idiot-targeting”) marketing the same way they should be able to use the aforementioned basic understanding of making money (no easy money!) to differentiate various offers.  

If a provider claims $59K in a week, you should be clever enough to understand that mere fact that if this strategy worked

everyone would use it to get rich

market arbitrage would simply make the opportunity disappear from the market quickly. Anyone's chances of using the same “secret formula” successfully would slowly evaporate as the arbitrage opportunity is closed.

The catch is to differentiate rational analysis from the spam that is trying to get in your head, using your emotions and triggering your System 1 - impulsive reaction, combined with a lack of knowledge to make you deposit money and probably lose it soon after. 

What should I look for before I choose a binary robot / auto trading provider?

Well, as mentioned, first thing is to forget about crazy notions of “doubling your money while you sleep”. This means remembering that there is no easy way to make money overnight - especially not the crazy sums of money as some services promise on the website. 

Take a look at that sweet money promised by AutoBinarySignals. com. 

SNAP OUT OF IT!!!

Don’t be stupid! These things are easy - if it is too good to be true, then probably it is not true! Someone is playing with your poor brain by tossing arbitrary numbers as that Nigerian prince that emails you occasionally!

source: Flickr/AmRosario

If there is no easy money, what can I expect from binary options auto trading?

It is important to understand that even with great win rates, the goal is to gain more money than leaving your money on the bank account or some other investment vehicle. Currently in advanced economies, banks are flushed with cash so they are paying next to zero [0%] to their customers. Anything above that, after adjusted for your risk preference, is good.

Your easy-Internet-money expectations make you the perfect target

By now you understand that your expectations are the key. If they are following the base rate and the understanding of “no-easy-money” rule, you are protected from your own stupidity in most cases. 

Achievable returns in binary auto trading

Rates of return tend to be much lower than the worst idiot targeting websites promise, however, still there is a chance to outperform bank deposit or even indices. These can change from month to month and I will certainly not make a claim that the rates one can achieve are guaranteed in the long run...

You probably will not get $59K profit in one week

Fair Binary Options, in one of their early assessments of the Binary Option Robot, tried to see how much one of the “ProTraders” (analysts that generate signals) managed to hit (May 2015). The results were such that about 65% of trades were winners and rate of return that could be achieved (with assumptions) was 6%. They did not calculate returns in latter analyses. See part of their infographic below.

They clumsily compared it to S&P500 that month. I wrote “clumsily” because they did not take in consideration the fact that S&P500 companies pay dividends (quarterly). 

But, nonetheless, this was one of the sincere looking analyses out there. In any case, those cute charts that show your capital growing like crazy with the auto trader you are assessing, are probably not very close to the true. So next time you see this:

...just close the browser tab.

They are probably right about this one - the code to financial success is actually  finding enough people who suffer from various kinds of stupidity that will buy the $59,177 a week story. The financial success, in this case, will be felt by whoever set up this auto trader website. 

Customer, or sucker, who buys up the “Top Secret Profit Formula” crap does not deserve any success nor will she find it, ever. Don’t be mad, it is part of the evolutionary process behind our survival - natural selection. This made us a species we are today...able to create amazing things, while at the same time not being able to override System 1 to act rationally.

Read disclaimers when looking at binary robot results

This is also something Fair Binary mentioned in their infographics of the Binary Option Robot’s results. The software has many settings to choose from, so rates in the infographic are not representative across all the population of this Robot’s traders, but only those who have actually had the same set of settings and used the same ProTrader. 

Since only their VIP members can get this, we guess the results are indicative of the average results achieved per month, that month, but not nearly close to being statistically significant enough to say that one can use them as a guideline for own returns on the service in the future.

False awards and seals

This one is probably one of my favorites. It nicely shows why most of these services include a disclaimer in their T&Cs (terms & conditions of service) that frees them from any liability and responsibility for the information they feature on their website. They leave fact checking to the customer and define it as her responsibility. Below is example from Top Binary Signals

Many binary auto traders or signal providers will award themselves existing and made up awards, with accompanying logo or a seal, claiming they have been awarded because they are amazing or whatever. Check out these false awards from Top Binary Signals 

It is very easy and it does not take much time to figure out that there is only one source on the Internet mentioning Top Binary Signals getting these awards - it is their own website. Just go ahead and check it by googling.

Unfortunately, people fall prey to their confirmation bias. 

They first see the promise of returns and they want the money. 

After that, any little thing that reassures them is seen as a reason to go for it 

while it should be seen as a deliberate plot to increase credibility where there never was any.

To conclude....

Three basic rules:

there is no easy way to make money online

use the first point to moderate your expectations and avoid traps

if it sounds too good to be true, it’s probably a trap /for your System 1

Some practical guidelines for avoiding “stupid” binary robot choices that hurt mother Earth’s intelligence:

even if the data on win rates provided by the auto trader looks really legit, understand that any calculations of profit they may offer are just illustrations but not promises or guarantees

if they imply there is a guarantee and that trading is risk-free, run away immediately with a self-congratulatory “I'm not stupid” grin on your face

robots listing individual signals that later can be checked easily will probably be closer to the realistic reporting on their win rates unless...

sometimes they lie about the win rate (this will be obvious) or 

they highlight one month’s result and let your little head make the mistake of extrapolating these results in the future

obviously - past returns are not indicative of future returns

returns are there, but be mindful of first two points and don't be a sucker

some guy on a video is not any more credible than some offshore company, no matter how sincere he seems (remember, System 1 makes stupid mistakes sometimes, the base rate is that there is no easy money)

the guy on a video, carrying a stick he calls trading strategy that brings “dough” is laughing about the gullibility of his customers every time someone deposits

Robots will probably trade more successfully and have higher win rate than average trader (keep in mind, arithmetic mean is skewed towards inexperienced population that makes a huge portion of traders)

keep an eye on details on binary robots’ websites - false awards, stupid testimonials, a long video presentation that actually repeats the same thing over and over, false awards or regulation logos on the website - many of these things can be easily checked for correctness if you just take some time to google it.

[binarytradinginsider-blog]

Draghi’s Open Mouth Operations

...and some say monetary policy does not matter at the ZLB

Well, ECB’s Mario Draghi seems to be becoming a true master of monetary policy communication. Unlike his counterparts in FOMC, that often send contradictory messages, Draghi has a habit of boldly stepping up in the moment when markets start having doubts about the future path of the policy. 

In the previous post, where I briefly discussed inflation path in the euro area, I mentioned the fact that QE hints and announcements were in fact moving markets stronger than the start of asset purchases itself. This is nothing weird, markets tend to price in the expectations of future moves of monetary policy. This is why monetary policy lags are actually a dubious concept. 

“Whatever it takes to save the Euro”

In any case, in the last few year, Draghi has stepped in several times by conducting “open mouth operations” to assure markets that the ECB is still active at times where it seemed they will not act. One of the first such instances was 2012 when Draghi threw in his famous “Whatever it takes” speech that basically eradicated the tail risks tied to the European debt crisis. 

As seen in the picture below, the EURUSD rate reflected this confidence in the common currency. Risks can influence confidence, and these are the cases where the exchange rate is not the best measure of the stance of monetary policy, at least not in the long term since it is hard to see which aspect of the policy, or which exogenous shock is actually driving the price. 

In 2011, Trichet suffocated the European economy by fighting tax-induced inflation. This would normally appreciate EUR, however, as it worsened the debt crisis, it sent the currency lower until Draghi’s summer of 2012. 

Hints of ECB QE move the rate even before the QE was officially announced

After that, Euro returned to a certain level only to see it depreciate as the rumors of the impending QE by the ECB gathered steam in the end of 2014. We already mentioned the effect it had on some inflation measures in the last post. Now, let's take a look at the EURUSD.

A more powerful ECB QE in December?

And now, the latest mini example of Draghi’s open mouth operations. The time for December economy forecasts by the ECB are getting closer and I have already warned about the fact that central banks should not let economy drift of their target path by passively revising forecasts. 

Draghi seems to understand this and hints about an extended and more powerful ECB QE are already moving the markets. Just recently he has actually strongly reaffirmed ECB’s commitment to the goal. It seems he is not going to tolerate expectations drift away while they stand passive (again):

“If we decide that the current trajectory of our policy is not sufficient to achieve that objective, we will do what we must to raise inflation as quickly as possible,” Draghi said in a speech in Frankfurt on Friday. “In making our assessment of the risks to price stability, we will not ignore the fact that inflation has already been low for some time.”

The EUR dropped immediately and technicians say some important trend lines were crossed for an inflection point. Other ECB officials joined in as Peter Praet said ECB may need to act with the inflation being too low for their taste. Euro is currently lower, at the level seen in April. Good data continued to pour in complicating the picture of the economy. Consumer confidence rose across the monetary union in November.

Look at the FOMC and December rate hike

We are waiting for December ECB meeting to see how the path of the EURUSD might look like. In any case, it seems that monetary policy is becoming the main driver of the exchange rate, but not just in the form of announcements coming from Frankfurt. FOMC minutes reveal that the Fed might be close to a December hike as members are unanimous that, given the path of the economy, December will be appropriate for the first rate hike since 2006.

EURUSD trade to be driven by divergence in policy

EURUSD trade is already heavily determined by the US policy. If it was a good call by the FOMC we will see further divergence. If the FOMC missed and acted too soon, the global economic risks may rise and the picture will grow much more complicated.

Source for charts: DailyFX/ Yahoo Finance

Draghi speech: Monetary Policy: Past Present Future

[melodyandviolence]

NYC Snow Days by  Jose Tutiven

[willssingalongblog]

In another paper, titled “Boys Will Be Boys,” they showed that men acted on their useless ideas significantly more often than women, and that as a result women achieved better investment results than men.

Daniel Kahneman, Thinking, Fast And Slow, page 214.  (via willssingalongblog)

[binarytradinginsider-blog]

Some notes on Inflation In Euro Area

It may not be that bad.

Ok, I have a chart here, showing the inflation rates in the euro area. We have been hearing for months now about inflation in the currency union being too low. And now, as the headline measure dips under zero occasionally, deflation is becoming part of our everyday jargon. This is unusual simply because we are seeing a switch from the world where inflation is a threat, to a one where it (should be) a goal. Based on the performance of central banks in the last few years, one would rather say it is a secret wish.

Euro area inflation improving with the QE?

Well, I am inclined to think that real QE effects were seen primarily in the last quarter of 2014 as the news on Euro QE were showing we are going to see ECB act, the announcement being only matter of the moment. Hints by ECB officials were only stoking the expectations. 

Monetary policy is about expectations

And monetary policy works trough expectations. If markets believed ECB would act decisively to keep inflation on its path, the crisis and post-2009 shocks would be much milder. Instead, in 2011, ECB hiked interest rates and choked the economy making the debt crisis worse by increasing debt/NGDP ratios.

What are the effects of QE on euro area inflation

Some of the real effects of QE have been seen already before the measure was announced as markets set the expectations accordingly. In the end, at the point of announcement, all that mattered was if the measure will beat expectations or not. It seems it beat mildly on the upside. 

That being said, its time to present the chart. 

The chart shows various measures of inflation. Headline inflation is the one usually referred as the rate ECB is interested in. However, that measure includes all items. Since central banks target medium-run inflation, the core inflation may show a better picture since it does not include volatile items such as energy and food. 

We know that oil prices have been a major factor driving the inflation down since summer 2014, however, weak demand is causing the inflation to stay subdued longer. So, from the side of core inflation we see things are not that bad and it actually grew last month at 1.1% beating analysts’ expectations.

Another great development is the measure of industrial goods where we see producers gaining pricing power since QE was announced. GDP deflator also seems to be gaining, albeit slowly, since Q4 2014.

We are not out of the woods yet...

All is not well yet, long-term inflation expectations market measures have been declining too, meaning the general trend will need to see stronger action from ECB. The Bank is expected to revise its forecasts in December. 

Do not target failure, target the forecast

This blogger sees this as a receipt for failure. In order to achieve the goal, the bank needs to start targeting the forecast. This means that if they suspect the economy will do worse in the future than when they initially acted, the solution is to adjust the policy and not revise (mostly down) the forecast for the future path of the economy. 

Or they could simply start targeting the level of aggregate nominal income (nominal spending).

[binarytradinginsider-blog]

Do you know where you left your money?

So, one of the most intriguing ways people loose money in binary options actually is not related to nothing I have mentioned in my introductory post. While being responsible for the support mail on my job, I have received all kinds of requests and questions. I have to say, most of them are actually quite sane. More about that in some other post. 

To showcase this kind of stupid, or

Why the Internet is not for everyone

I wanted to shortly present one kind of requests that we usually never get reply to when we answer the first e-mail. It goes something like this

“I have deposited money with you. I am trying to contact you but noone is responding. Give me back my money or I will call the police”

Withdrawal in binary options is impossible sometimes, especially when...

Some might think, considering the mentioned scams in binary options, this is a legitimate request. And I would agree if there wasnt the little fact that the website I worked for was not a business that took money from customers. There was no place on the website where that customer could have placed a deposit or send us money in any other way. 

Losing your wallet in the World Wide Web

This happened quite often which lead me to believe that many customers actually do not even understand the basics of surfing the web, so how could they understand risks that accompany binary options trading. 

These people are clearly bait for get rich quick schemes. But in essence, it seems they could be leaving money around all around the web if they do not understand how to get back to the website that actually took their money promising them sweet profits from binary options trading. 

I guess somewhere between the credit card number form and the binary platform, the poor guy clicked that weird new button or tried loading something else only to get lost in around the corner. How do you call this kind of stupidity? Do I need to use quotes with this kind of stupidity? Is it sad or funny?

This is in a way related to my” theory” that Internet acts as a place to reinforce our biases, instead of provoding us relevant information creating a new golden era of enlightened human race.

The latter was my theory in the 90s. It was crushed in many cruel ways by biased shite in various comment sections trough the years, but more about that some other time.