It was time for Chrysler to present its reorganization plan. Unfortunately, company has been unable to reach an agreement with some of its creditors over treatment of $6.9 Billion secured debt. This group was called “non- TARP lenders”, seemingly institutions which have not received funds from the government’s Troubled Asset Relief Program. These creditors are getting some bad press from Treasury right now for being non cooperative, while they in turn claim that government would not accept any proposal made by the group. Whatever the case might be, this leaves Chrysler out of options on the eve of its reorganization deadline.
Automaker will file for Chapter 11 bankruptcy protection in New York maybe as early as today, which, in a very strange twist, will make it eligible for up to $8 billion in federal aid to rebuild. This gets even more interesting. Officials say they expect the bankruptcy to last only 60 days, giving Chrysler time to finalize a partnership with Italian automaker Fiat.  Chrysler will continue to make cars and honor its warranties during that time. I think this is very convoluted since, one way or the other, company will get federal aid. If indeed sixty days is enough for Chrysler to become solvent again, this would be the strangest bankruptcy on record. Should this be the case, there is nothing to fear, right? Financial magicians from the Treasury are coming up with new tricks all the time.
Their colleagues from the FED didn’t come up with anything new yesterday, largely as expected, but I’m sure they are working hard creating financial alchemy. Rates were left unchanged. Not so in New Zealand, were an emphatically transparent monetary policy was staked out today, with the central bank forecasting interest rates will remain at record lows until the “latter part of 2010” as it cut its official cash rate by 50 basis points to  2.5%. This is the lowest level ever for Reserve Bank of New Zealand.  I had had some buy orders standing for NZD pairs, by they were cancelled, as stated in last post.  Kiwi had a day resurgence yesterday, but I wasn’t really able to watch markets closely, so no trades there.
I was expecting weakening of the Yen, unfortunately it was very difficult to find “set and forget” type of trade, something that wouldn’t need baby sitting. Most JPY pairs rebounded sharply, but didn’t present any easily recognizable entry points.

I wanted to go long either EUR-JPY or AUD-JPY, but could find suitable buy point. Shorter time frame would have been great, but not this one. Potential entry at “A” didn’t have good risk properties, with the most logical “B” being too far. These kind of sharp “V” bottoms are difficult. Perfect example where one should have zoomed to, say, 15M chart.
On the bright side, there are more Yen crosses available for trading, and they should be evaluated on their own merit. The beast, presented the kind of opportunity I could discern.

This was a trade I didn’t have to follow and produced results expected. This is from yesterday, about an hour after trade was over with. Good 200 pips and pretty much the only thing I did yesterday in discretionary trading.
I just opened a long position in EUR-AUD.

This is a good entry point, reasonable risk and about 200 pips target. Correction to this down move is very possible, next magnitude time frame supports this bounce also.

And this here shot at NZD-JPY to close the week. Two different orders, both buys. Upper one has objective of 57.70. This straight move of Yen will deserve another, closer look. Either tomorrow, or over the weekend.

Mike K.