Friday, May 26, 2006

Amazing Linux Live-CD Technology

For those of you that are new to the "Live CD" technology that many Linux and open-source distributions now offer, I will attempt to impart a concise introduction to this amazing software achievement.

In short, Live-CDs (or DVDs) allow you to boot your computer into a fully functioning Operating System (OS), from a CD or DVD containing the OS, without any need for installing the OS or any additional applications onto your hard-drive - and, in as little as one minute! Perhaps this does not sound very exciting at first. But, consider the length of time it takes to perform a complete install of Microsoft Windows XP, and a few popular programs like MS Office, Adobe Acrobat, and the likes to your computer's hard-drive so that you can have a "working machine" (or, at least one that has enough installed to be useful). At best, you would probably face 2 or 3 hours of "fun" trying to get a machine up and ready, and perhaps another 2 or more hours just to apply the latest security updates, service packs, and other critical fixes. There is a better way!

Live CD's must detect your machine's hardware configuration on-the-fly, and configure the OS to make use of that hardware upon booting. This is quite a feat, seeing that this same task takes MS Windows an exorbitant amount of time to accomplish even when installing to your hard-drive. Most newer variants even detect my Gigabit Ethernet card and high-end graphics cards OK, though none to date have detected my Linksys Gigabit Cardbus adapter successfully (I wait eagerly for that to change) on my notebook.

So why should you be interested in a LiveCD, especially if you do not particularly want to use Linux? Well, I have provided the following few reasons why I consider this technology so important:
  • Virus Protection: since you are running from a CD, your system is rather isolated from the impact of any virus you may encounter. If one was encountered, simply rebooting from the CD will restore the original pristine state of your operating environment. No changes are saved to the CD between reboots, though you can save documents and settings changes to a USB KeyDrive or a partition on your hard drive if you choose.
  • System does not "degrade" in performance over time: unlike a hard-drive install of Windows or any other system that suffers from slowdown as the number of temporary files increases, security-updates have been applied, and a host of other software "patches" are applied. The CD remains the same each time you start up -- a nice clean "fresh" system!
  • Privacy and Security: once again, you are running your OS from a CD and in RAM; so, once you turn off the computer, there is no trace of what you were doing while running the OS (unless you specifically choose to save such information to a more "permanent" device). Don't worry about leaving copies of confidential files in "My Documents" or what have you; for, if you did, they will just not exist next time you boot from your CD. There will not be any "malware" or "cookies" left to track your Internet activity either - so there is no chance someone will acquire any saved user/password information from anywhere on your machine (if any was stored, it is wiped when you reboot).
  • Debugging and Forensics for your Windows machine: even if your Windows installation has failed utterly, you can perhaps recover valuable files from your hard-drive by booting with a Linux LiveCD and accessing what is left of your file-system from Linux. Then, you can copy files off to somewhere while attempting to repair your Windows environment. And, with some LiveCD variants, you can use tools like CaptiveNTFS to actually modify the contents of Windows files that may be the cause of your system failure.
  • Testing new Software: if you are interested in trying out various popular open-source softare prior to installing on your hard-drive, this is a great way to go. Not only the OS can be tested, but most LiveCD images include a range of applications like OpenOffice, Gaim, FireFox, and many, many more - all preinstalled and ready to run!
  • Portability: you can run these CDs from nearly any computer that has a CDROM or DVD drive; regardless of what OS is already installed on those PCs or Mac systems. Simply pop in the CD and reboot into your Linux environment of choice.
  • Speed: you can have a fully operational computer in as little time as it takes to boot from CDROM. Compare that to the length of time it takes to perform a complete install of Microsoft Windows XP, and a few popular programs like MS Office, Adobe Acrobat, and the likes. When I get a new computer, I quite often first "test drive" the computer using a LiveCD, prior to committing many hours to installing software on my hard-drive.

You can also easily run your LiveCD from within a Virtual Machine (VM) using VMWare's free VMWare Player technology, coupled with this tiny ISO-Image-running-virtual-machine-config. I say tiny, because you only need to download one file ( to make this possible, and it is only 4KB in size! This tiny VM-Player config lets you start VMWare Player up with the intention of loading the booted-machine with the contents of a LiveCD (Linux variant) ISO-IMAGE. The zip file contains the VMware config files, and all you need to do is copy the ISO Image for ANY LiveCD variant you want to try into the directory with these VMWare .vmx/.vmdk files (and, rename it to livecd.iso). Then, run the VM. What a neat way to try out your latest LiveCDs without any shutdowns/reboots, making LiveCDs even more awesome!

I personally prefer Kanotix and Kubuntu Linux variants for their Live CDs, and I have had excellent experiences with these distributions automatically detecting all of my hardware and making it available from within the OS. A great resource for locating additional Linux derivations and Live CDs is This site is a fantastic resource for keeping up with the latest Linux and open-source distributions, applications, and the likes.

Though many applications are pre-installed in the LiveCD environment, you may wish to have other applications available. Have no fear, most new LiveCD setups include a technology called UnionFS that allows you to actually "install" additional software. Kanotix makes this even simpler by supporting "klik" applications, which can literally be installed with a click!

Now, wouldn't it be fantastic if Microsoft would release a Live DVD (yes, a DVD would be necessary due to the bloated size of the OS and applications) version of Windows XP that came with pre-installed Microsoft Office and other essential Windows applications? There have been many times where I so wish I could have such a thing available instead of facing the hours of installation and preparation time it currently takes to get a Microsoft-centric system up and running from scratch. I would not count on this happening any time soon though, since Microsoft will unlikely be able to find a way to thwart the subversive efforts of software pirates that would all to quickly make illegal copies of such a thing if it existed! (not that pirates don't do that already with existing Windows and Office software).

So, download an ISO (i.e., burnable CD/DVD ROM Image file) for a LiveCD today, create your bootable media from it, and give it a test run. Once you get acquainted with these OS's and recognize their usefulness, they will likely become an invaluable tool you keep close at hand.

Friday, May 19, 2006

Will you be able to retire?

A couple days ago, PBS's aired an episode of Frontline entitled "Can You Afford to Retire?" If you did not have the chance to watch this enlightening story, I will give a quick recap here of some key points that may very well encourage you to save more for your retirement.

In summary, the study of the American Workforce conclusively demonstrates that most Americans will not be able to afford retirement, regardless of whether or not they save money in 401Ks or not, since their rate of savings is grossly inadequate for them to maintain their current lifestyle and standard of living at retirement (unless they continue to work into what should be their "retirement years" - which rather defeats the purpose of calling it retirement). This lack of preparedness occurs across a broad segment of the workforce, and includes both white-collar and blue-collar workers alike. And, most individuals think they will have enough to retire, regardless of the statistics and reality they must face.

This Frontline episode focused on the shift from company pensions to 401K plans over the past couple decades, as well as how corporations have been unloading their under-funded pension plans on the American taxpayers at an alarming rate. Right now, the PBGC, or Pension Benefits Guarantee Corporation (read: yet another taxpayer funded corporate bailout corporation), is $23 Billion in the hole. This is a result of massive corporate Bankruptcy filings (like the United Airlines filing) that allow companies to drop massive amounts of pension-debt onto this government agency during their (Chapter 11) "restructurings". The most frightening fact is how much under-funding of corporate pensions still exists that has yet to be dumped on the PBGC -- total under-funding has jumped from around $100 Billion USD to nearly $450 Billon in just the past 4 or 5 years! Why should this concern you? Well, aside from the fact that you the taxpayer will be taking on even more debt for these bailouts, if you happen to rely on a corporate pension that ends up being turned over to the PBGC, be ready to see your monthly benefits drop considerable, thus jeopardizing your retirement lifestyle.

Regardless of the pension issue, Americans in general are not prepared for retirement. They nearly all underestimate what funds will be needed for retirement. You essentially need to put away 15% of your earnings per year at a minimum (some experts recommend 25%!) to maintain your standard of living into your retirement years. And, this means you must save NOW! The longer you wait, the higher that annual savings contribution must be, until you finally reach a point where it is impossible to defer enough of your income into savings to reach your goals.

Many obstacles to a secure retirement exist, but some are within your control. Get control of your discretionary spending now, not later. Saving is a tough thing to get used to: it doesn't give you that instant feeling of satisfaction like you get when making a discretionary purchase like that $4 Smoothie or Coffee-drink you like so much, or that Cell-phone plan you so desparately need in order to survive. Make smart choices now, and the pain will be a lot less than if you have to make severe lifestyle changes in the future.

You can afford to retire, but only if you control your spending and meet substantial savings targets now.

Monday, May 15, 2006

US Tax Policy Bad for the Long-Term : Part 1

I start by calling this "Part 1", because there are so many issues with the current US tax policy with regards to the long-term health of this country, I will undoubtedly be writing many a subsequent article about this mess.

I begin by discussing a topic closely related to prior blog entries (about the falling dollar, lack of savings, and the likes) - in particular, how current US income-tax policy encourages the average person to not save.

Whereas recent tax law changes give favorable income-tax rates to earnings from capital gains and dividends (which disproportionately benefits the wealty), earnings that the "average" person makes from their investment activities are more likely to be taxed at normal income tax rates. The current maximum tax-rate on long-term capital gains and dividends is only 15%. What is the normal income-tax rate compared to this 15% maximum? The 2006 tax-rate table below is provided courtesy of:,,id=150856,00.html

(2006 Rates for Married, filing jointly - other tables are available via URL above)

income >
And, <
The tax is:
$0 $15,100 10% of the amount over $0
$15,100 $61,300 $1,510.00 plus 15% of the amount over 15,100
$61,300 $123,700 $8,440.00 plus 25% of the amount over 61,300
$123,700 $188,450 $24,040.00 plus 28% of the amount over 123,700
$188,450 $336,550 $42,170.00 plus 33% of the amount over 188,450
$336,550 no limit $91,043.00 plus 35% of the amount over 336,550

As you can see, if you are married and make over $61,300, or single and make over $30,650 in taxable income (i.e., you are squarely in the so called "middle-class" realm), you will be paying 25% or more in taxes on your any investment income that is taxed at normal income-tax rates.

Now, consider the following "investment options" that the average person may have:
  1. Savings Accounts, Money Markets, and other similar cash-accounts: any interest earned is taxed at full income-tax rates;
  2. Savings Bonds (also Treasury Bills, Bonds, etc): any interest earned is taxed at full income-tax rates, though at least the interest is free of State taxes;
  3. CD's (Certificates of Deposit): you guessed it, earnings are taxed at full income-tax rates;
  4. 401K retirement accounts: though a more thorough discussion is needed, the bottom line is that all those earnings you see on your 401K account statement are, for the most part, capital gains and dividends your investments have earned. But, when you go to withdraw funds from your 401K in the future, those earnings are taxed at full income-tax rates (sorry, the government isn't giving you a capital gains and dividends reduction on earnings in that 401K; presumably, this is because you had the benefit of investing pre-tax dollars into the 401K fund to begin with - though you had that same benefit before taxes were cut on capital gains and dividends).
So, why do we not encourage savings in this country by extending the 15%-maximum-tax-rate to these investment earnings the average person has? Since our national savings rate is zero, how much could this possibly cost the government in lost tax-revenue? And, a common argument for tax-relief on dividends and capital gains is to encourage business investment and growth. Well, any extra dollars sitting in savings accounts or other investments still encourage investment and growth, since banks make loans against deposits, and the government funds it debt with bonds (and, US citizen purchases of bonds reduces our dependence on foreign buyers, and reduces current account deficits with foreign countries, which ultimately helps our ability to grow and prosper).

The argument can be made that your funds are not "at risk" as they are when invested in equities. That may be, but historical rates of returns are also lower on fixed-income funds vs. equities as well. I personally believe that funds are still "at risk", though at a significantly lower level. When you place your money into CDs or Bonds, you are taking a risk that interest rates will not rise substantially during the time you hold these investments - since, if they do, you suffer the opportunity cost of not being able to realize those new, higher rates. As for short-term interest (on money markets, checking, savings accounts), you may not have nearly as much risk, but once again you are probably not realizing as high of rate as you would if you locked up your money for a longer term, thus you risk not getting the maximum amount you can on your funds. Bottom line: there is always some risk, and since the reward possibilities are tied to the risk level, why not give all these investment vehicles the same tax-preferred-earnings status of a maximum 15% rate? It would go a long way to encourage the masses to save; and if it didn't, what is lost - nothing, since we save zero currently!

For the long-term health of this country, we must encourage and promote savings so we can invest in ourselves in the years ahead when capital from abroad may become less free-flowing.

The Dollar, Cheap Imports, and No US Savings...

A friend of mine, who has businesses in the USA and China, emailed me some wonderful feedback about my recent blog entry about “Currency Markets and the Falling Dollar”. His perspective and insight add further dimension to my discussion.

Here are some quotes and excerpts he provided, plus some commentary I offer in return:

“In regards to the Chinese currency revaluation, we need to first realize that there are two camps interested in the rate, the first are US investors who do not want to see the exchange rate change as that increases there costs of doing business [in China]. The second are those who want to try and make up gaps in the trade deficit and make Chinese goods more expensive so they can compete. In my opinion cheap Chinese goods are an asset to more people then poorly competing US firms that have higher production costs. Chinese have along history of not importing and it is not because the foreign goods are too expensive – it is that they do not cater to the Chinese culture. The US has been an expert in exporting its culture around the world, however when there are countries who are not willing buyers, they [US firms] resort to other means to try and force the issue. Imagine a 40% revaluation of the currency and how that will affect prices of everyday goods for Americans, versus how much revenue it will bring in for US companies that export a few more goods to China. The Chinese government is taking steps to change the exchange rate, and personally it has already cost me quite a bit of money as a US investor in China.”

“Since I have been here [in China] I have already seen a few percentage points drop [in Yuans / USD]. It’s a strange feeling because I understand the market fundamentals and how a revaluation will make things fairer for other competing nations, however I feel the side that wants to keep my costs low, and that influences my thinking. I can now see how big business/governments get so corrupt.”

True, the currency (the Chinese Yuan) is allowed to “float” now against the USD, though within certain parameters that limit the amount of float per day. Here is an article on the recent value of the Yuan, and how it is making gains against the dollar.

Regarding the comment about how big business and governments can get so corrupt, my friend is dealing with the influence of the exchange rate on a relatively small business and investment in China (< $5MM USD / year). And, even at his current investment level, he sees how keeping the value of the Chinese currency depressed works to his advantage and keeps his labor and direct costs in China low. Can you imagine how badly the largest corporations with huge investments in China must want the Yuan to remain week vs. other currencies? It is in their best interest for the Yuan to stay low, so long as countries like the USA continue their Chinese-imports-feeding-frenzy.

And, speaking of this import feeding frenzy, my friend has this to say:

“The fundamental problem with the US financial state is that it is a culture of [people who are] spenders and not savers. The savings rate in many Asian countries is near 40% and the US, I believe, is close to single digits [Mike comment: actually, it is ZERO – read this recent article about the savings rate in the USA hitting ZERO]. This creates a large need for capital in the US which cannot be supplied by the little saving Americans have. This by its very nature forces the US to export its money and other counties are willing buyers at a low price. The sucking sound you hear is the need for US capital because there is none here [in the USA], we have spent it all. This is why a large trade deficit isn’t a bad thing for the US. This is an indication of foreign countries willing to invest in US Dollars. The question is: are we doing the right things with the foreign capital? If we are buying expensive houses and sports cars, then the answer is no. If we are improving education, funding cutting-edge research, and so on, then yes. As we export our culture and turn these [other] societies into spenders and not savers, this competition for capital will increase, and with more competition, the Dollar will slide further against other currencies.”

"Another interesting problem that I think underpins many future issues will be that of investment in research. Currently the US has shifted from traditional production to high tech production, and this I believe will cause a fundamental problem in the future. The issues stems from the combination of government’s inability to fund long term science projects that will help keep the lead, so to speak, for the US in the technology sector, and market driven economies inherent weakness in encouraging long term investment. As “third world” countries invest more in higher education and at a higher rate than the US, the low hanging fruit the US currently eats will be going away very soon. I feel and this includes software development, technical management, and high tech production and research. The higher hanging fruit requires massive long term investment that just doesn’t seem to be a priority in a heavily market driven economy where the pressure is to meet quarterly expectation, and where no one cares about the company’s growth ten years from now. The government has been in a freefall of cutbacks on research since the 70’s and there doesn’t seem to be any comeback on the horizon. This, coupled with the inability to cut back spending in general, leaves us [the USA] in a bad situation; the government is spending far more on things that will not take us into the future […] it seems whenever countries historically get on top, they then look for ways to maximize their lifestyle and loose the “eye of the tiger” [that got them to the top to begin with]. The danger of this is that the US will find itself on equal ground with many new nations, and couple this will a falling dollar, it may cause countries currently holding dollars to start to sell, and we all know what that will do."

Wow! Those are all great points and wonderful insight! Keep it coming people!

The final comments from this friend also covers the topic of my other blog entry about stock market investing. His overall take on investing is an interesting one we should all keep in mind, since it focuses on the macro psuedo-psychological factors behind buying and selling stocks, currencies, and the likes (and, how their expectations drive price determination in the market):

"One observation you made [in your blog] which I think is critical for people investing to understand, is that relationship between good and bad news and the price of the stock, currency, or whatever instrument being trading. The point that I think is often misunderstood or forgotten is that the market price already reflects the expectations of that market on the instrument. Simply put: the dollar doesn’t go up much on good news because people are expecting good news! You expect good news from Microsoft, and not bad news, which is why it is a blue chip stock. Bad news on a stock that is expected to do well is really bad news for the pricing expectations, and therefore has a greater impact on the percentage change. People need to remember that when they invest in a stock that they think is going to really go up, that you are betting against the market, which sets the price based on what everyone thinks will happen. This [logic] is the same on the downside. [...and] why you find stable companies that have modest returns, and are expected to pay dividends. This [logic] is especially true in the case of the dollar, which has been such a large tool for countries to help stabilizer themselves with (by holding lots of US dollar reserves). As I said before, as more countries start down the road of spending as the US (such as the EU, China, etc.), there will be more competition for the money from countries that save, and this will push down prices paid for currencies currently held by [savings countries that move towards] spending countries."

Saturday, May 13, 2006

Investing in ADR (American Depository Receipt) Stocks

Invest in Foreign Stocks from the USA

When a company's ordinary shares (ORD) are based in another country, and are home to a foreign country's stock exchange (such as the Tokyo or London Stock Exchange), and trade in a foreign currency, how can you easily invest in these non-US equities?

The answer may be ADRs (American Depository Receipts), which can be a great way of owning shares in foreign companies. Not all foreign companies have ADRs, but those that do give you a way to trade shares in these foreign firms right here in the USA on our own exchanges like the NYSE (New York Stock Exchange) for example, and trade in US Dollars (USD).

NOTE: see my related blog about Currency Trading Basics: Understanding the Exposure Implications (on your Forex holdings) Related to Exchange-Rate Fluctuations (includes a quick-reference diagram / visual-aid for magnitude-of-move comprehension).

Understand the Implications of Underlying Currencies on ADR Share-Prices

Before trading ADRs, you need to understand how they are priced, and the impact that currency-exchange-rates may have on your investment!

ADR "shares" will represent some multiple or fraction of an ORD share. This ratio of ADR:ORD is important to understand, especially if you trying to figure out how the ADR is priced as compared to the ORD. The ADR:ORD ratio will be one of the following:
  • (1:1) — meaning, a single ADR share is equivalent to a single ORD share. E.g., Bayer AG (ADR ticker: BAY) whose ADR trades 1:1 with the underlying ORD share trading on the German Stock Exchange in Euros;
  • (1:n) — meaning it takes multiple (n) ORD shares to equal 1 ADR share. E.g., HSBC Bank ADRs (NYSE ticker "HBC") trades at a ratio of 1:5, with the underlying ORD share trading on the London Exchange in Pence (i.e., 1/100 Pounds, or a British Penny in essence)
  • (n:1) — meaning it takes n ADR shares to equal 1 ORD share. E.g., SAP AG (Ticker SAP), trades at a ratio of 4:1, with the underlying ORD share trading on the German Stock Exchange in Euros;
Though ADR prices are quoted on US Exchanges in USD, you may wonder how they come up with the price. And, this will be important for the next point I'll make, which is: the rather substantial potential impact of currency fluctuations on your ADR price.

Using HSBC (ADR: HBC) as an example, whose closing price was approx. $90.00 USD, here is how that ADR price value is arrived at from the ORD price:
  1. Start with the ORD price (in Pence) was approximately 950. I.e., 9.50 Pounds;
  2. Now, obtain the ADR:ORD ratio, which is 1:5 in this case;
  3. Obtain the currency-pair exchange rate: e.g., the British Pound (GBP) was trading at approximately $1.89 USD per GBP;
  4. Finally, perform the calculation.  Start by multiply the ORD price by the ADR:ORD ratio (5 in this case), since one ADR represents 5 ORD shares, giving us 47.5 Pounds (i.e., 9.50 x 5). Next, convert to our local USD currency by multiplying the prior result (GBP 47.5) by the current effective currency exchange rate of 1.89 USD : GBP, which yields the current value that foreign share should be worth in local currency equivalent, or $89.775 USD.
Voilá!, it really does come out to the price the ADR is trading at!

So, one thing that should become quite clear in this "lesson" is the impact of the foreign-currency-exchange-rate in the pricing of the ADR. You may choose a wonderful foreign company to invest in, but, depending on whether the dollar strengthens or weakens against the currency that foreign stock's ORD shares are priced in, you could still lose money. Conversely, a poorly performing foreign stock could make you money on your ADR holdings if the dollar tanked against the currency the ORD shares are priced in.

To make this fact clear to you: Presume you buy HSBC stock at an ADR price of $100.00/share. Even if the HSBC stock underlying ORD shares on the London Exchange never move at all, but the dollar swings downward by 2% against the pound, you will have made 2% on your ADRs, since it now takes more dollars to buy the same amount of HSBC stock ORD shares in Pounds. Likewise, if the dollar gains 5% against the pound, it takes fewer dollars to purchase an ORD share of HSBC, and you will have lost money on your ADR shares. So, be sure to keep currency fluctuations in mind when investing in ADR shares!

Useful ADR Resources

Check out foreign stock exchanges to get quotes (in base currency for ORD shares) for the stock you are researching. For example, to see HSBC quoted on the London Exchange, go here: HSBC Bank, PLC (ticker HSBA) on its native London Stock Exchange website, quoted in pence (i.e., pennies in the GBP or Pounds Sterling currency system).

A nice resource for checking out ADRs is the Bank of New York Mellon (BNY Mellon) Depository Receipts web site. They have a rather comprehensive DR directory that allows searching by region, industry, and many other criteria. It also shows ADR:ORD ratios, underlying country, and more.

Continue to read this Software Development and Technology Blog for computer programming articles (including useful free / OSS source-code and algorithms), software development insights, and technology Techniques, How-To's, Fixes, Reviews, and News — focused on Dart Language, SQL Server, Delphi, Nvidia CUDA, VMware, TypeScript, SVG, other technology tips and how-to's, plus my varied political and economic opinions.

Friday, May 12, 2006

Currency Markets and the Falling Dollar

Having watched the currency markets quite closely over the past year, I have made a few macro observations about currency swings in relation to the US Dollar (USD):
  • Regardless how good the economic news should be for the USD, the greenback is slow to make gains against other currencies;
  • Regardless how small any bad economic news is for the USD, it will quickly lose ground to other currencies;
Now, I have also noticed that regardless of how much the US Treasury and other government agencies speak of a "strong dollar policy", there is nothing to back that up. In fact, many actions seem to enfore the opposite, including:
  • Rampant Federal and State spending, and incredible amounts of deficit spending (and debt buildup as a percent of GDP) to say the least;
  • Inability to get China to float their currency in a more realistic zone of worth (perhaps as much as a 40% revaluation);
  • Massive "sucking sound" as cash is headed out of the USA to literally fuel our economy (read: USD is headed to the middle east and other oil producing countries);
  • Tax policy (and foreign and domestic policy too!) that, I feel, is eroding the standard of living in the USA with a direct assualt on the middle class!
Perhaps it is just coincidence, but as recently as 2001, the USD was very strong against foreign currencies such as the New Zealand Dollar (NZD). Just take a quick look at the NZD Historical Rates, and correlate them with the US Debt as a percent of GDP mentioned above. Tight correlation. By the way, the NZD makes a fairly good "baseline" currency to measure against since the country has negligible national debt, and has been that way for a while.

With the China situation, we are shipping money out of here at a record pace. We consume their manufactured goods at a record pace, while they build their account surplus (at the expense of our account defecit) month after month. Add to it all the investment that USA-based firms are making into China (instead of here), and you compound the movement of the USD.

That "sucking sound" I mention above is quite loud. Just look at the other side of the equation, where the producers like Saudi Arabia have seen their Net Foreign Assets surge. This trend is likely to continue, putting further pressure on trade imbalances, and increased currency dilution for the USD. If that was not bad enough, all of the (unfriendly) oil producers have figured out the greatest thing about being an oil producer -- simply rattle your sabres, make threats, and talk up the cost of oil, and you can easily raise the price of your own product! Wow, if only we could all just make a fuss and issue threats to our customers every time we wanted to increase the price of our product... what a world it would be.

When it comes to Tax Policy, this is a whole story of its own. I'll get to that part of the equation later.

Bottom line: until the macro-economic forces discussed above are addressed, the dollar will have strong headwinds preventing it from quickly regaining ground. Which, is why I presume the falls for the USD are faster than any subsequent partial-recoveries.