Wednesday, 22 February 2012

90 points in one shot NIFTY TRADE OF THE WEEK :-

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NIFTY SELL GIVEN @ 5600-10 SL 5634 TGT 5515-20 TILL TOMORROW.
BUT OUR TGT DONE IN INTRADAY.
ENJOY COOL 90 POINTS IN SINGLE SHOT SINGLE TARGET.
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MCX OPERATOR

Tuesday, 21 February 2012

GOLD UPDATE

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Gold hits 1-1/2-week high after Greece deal

Singapore: Spot gold rose to its highest in a week and half on Tuesday as the dollar weakened after eurozone policymakers sealed a deal for a second bailout for Greece.

Gold has drifted between USD 1,700 and USD 1,750 in the past two weeks, following the ups and downs in Greece's struggle to obtain a much needed rescue package.

"Gold may remain in a consolidation phase in the near term, as it is lacking a catalyst," said Hou Xinqiang, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.

"The supportive factors -- the euro zone debt crisis and expectation on loosening monetary policies around the world -- have been around for a while and gold needs something new to break the range."

Spot gold inched up 0.4 percent to USD 1,740.35 an ounce by 0624 GMT, after touching a one-week high of USD 1,740.49.

US gold rose 1 percent from Friday's close to USD 1,743.5 following the Greek bailout, catching up with gains in cash prices after the US market shut on Monday for a public holiday.

Eurozone finance ministers sealed a 130-billion-euro bailout for Greece on Tuesday to avert a chaotic default in March after persuading private bondholders to take greater losses and Athens to commit to deep cuts.

The decision will help Athens resolve its immediate payment needs, but Greece still faces a bleak financial and economic outlook in coming years.

The dollar lost 0.5 percent against a basket of currencies, making commodities priced in the greenback cheaper for holders of other currencies.

The prospects of further liquidity injection by the European Central Bank next week will also help prices stay buoyant, as it will help keep the opportunity cost of holding bullion low.

Technical analysis suggested that spot gold faces resistance at USD 1,735 an ounce, and a break above this level could send prices towards USD 1,747, an analyst said.

"The physical market is very quiet and there seems to be less interest from funds," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong,

Fung said the premiums on gold bars in Hong Kong were steady at USD 1 to USD 1.50 an ounce above London prices.

Money managers cut their net long positions in US gold futures and options by about 6 percent in the week of February 14, their first decline in five weeks, said the US Commodity Futures Trading Commission.

Spot platinum rose 0.8 percent to USD 1,653.50 an ounce, up nearly 19 percent so far this year, benefitting partly from supply concerns in top producer South Africa.

Impala Platinum (IMPJ.J), the world's second-largest platinum producer, has agreed to re-instate all 17,200 workers who were dismissed following an illegal strike, aiming to end a dispute that paralysed the company's biggest mine, the miners' union said.

Bureau Report
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MCX OPERATOR

Monday, 20 February 2012

TRADING RULES

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TRADING RULES:-

These are some of the trading rules which are universally valid for stock trading. Take a print out and nail it on your desk.



#Never risk more than 10% of your trading capital in a single trade.
#Always use stop loss orders.( Here you should know your loss you can give in a situation where the trade starts going against you.)
# Never do overtrading.
# Never let a profit run into a loss.
# Don't enter a trade if you are unsure of the trend.
# When in doubt, get out, and don't get in when in doubt.
# Only trade active markets.
# Distribute your risks equally among different markets.
# Never limit your orders. Trade at the markets.
# Extra monies from successful trades should be placed in a separate account.
# Never trade to scalp a profit.
# Never average a loss.
# Never get out of the market because you have lost patience, or get in because you are anxiously waiting.
# Avoid taking small profits and large losses.
# Never cancel a stop loss after you have placed it.
# Avoid getting in and out of the market too soon.
# Be willing to make money from both sides of the market.
# Never buy or sell just because the price is low or high.
# Never hedge a losing position.
# Never change your position without a good reason.
# Avoid trading after long periods of success or failure.
# Don't try to guess tops or bottoms.
# Don't follow a blind man's advice.
# Avoid getting in wrong and out wrong; or getting in right and out wrong. This is making a double mistake.
# When you lose don't blame it on luck. 
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MCX OPERATOR



Natural Gas Positional 12 points tgt done.

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positional buy NG recommended at 118-119 sl 117 (closing basis)
Tgt 130-32
Super shot 12 points tgt hitted.
enjoy Profit.
ENJOY Operator Based News.
"Safe Trade Happy Trade"
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MCX OPERATOR

World Economy Update

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European officials attempting to fend off the euro area’s first sovereign default will try to settle remaining disputes today as they close in on a 130billion-euro ($171 billion) Greek bailout.
Finance ministers meet at 3:30 p.m. in Brussels, joining Greek Prime Minister Lucas Papademos , who arrived on the eve of the gathering. Their talks on his country’s second bailout in two years will aim to reconcile demands on Greek leaders, a private-creditor debt swap, the role of the European Central Bank and setting up an escrow account for interest payments.
European leaders including German Chancellor Angela Merkel want to wrest the common currency out of its crisis amid signs of improvement in the global economy. Focus has returned to Greece as the threat of economic collapse and exit from the euro has stoked officials’ concern such a scenariomay provoke chaos.
“I don’t think there will be a majority to go down any other avenue” than a Greek bailout, Austrian Finance Minister Maria Fekter told state broadcaster ORF yesterday. Her French counterpart, Francois Baroin , told Europe 1 radio today that “we have all the elements of an agreement.”
Should ministers fail to back the bailout package at their Brusselsmeeting, the issue could be pushed off to the next European Union summit on March 1. A disrupted schedule would threaten to spark unease amonginvestors and reverse a decline in bond yields in indebted nations such as Italy and Spain .
Scope ‘to Disappoint’
“Deadlines are shifted and there is scope for events to disappoint,” Neil MacKinnon , a global macro strategist at VTB Capital in London and a former U.K. Treasury official, wrote in a note to clients yesterday.
Italian and Spanish bonds continued their advance amid optimism that an agreement is in reach, while the euro gained as much as 1 percent to $1.3275 today, bringing its climb against the dollar this year to more than2 percent. The yield on the Greekbond due October 2022 declined 30 basis points to 34.09 percent. European stocks rose, with the Stoxx Europe 600 Index (SXXP) climbing 0.6 percent to a six-month high.
Merkel, Papademos and Italian premier Mario Monti expressed confidence on Feb. 17 that ministers will resolve open questions, and Papademos flew to Brussels yesterday to facilitate discussions. International Monetary Fund Managing Director Christine Lagarde also will participate in the finance ministers’ talks, according to IMF spokesman Gerry Rice.
Critical Talks
Papademos’s presence was deemed necessary because immediate coordination is required with Finance Minister Evangelos Venizelos, according to a Greek Finance Ministry official. A final meeting with Greek government officials such as Papademos and Venizelos andthe International Institute of Finance could also be required, the official said.
The German Finance Ministry is “increasingly optimistic” on agreement, though some pointsneed to be resolved, including a plan for an escrow account to ensure that Greek aid money goes to paying creditors, ministry spokeswoman Marianne Kothe said in Berlin. Euro officials have reached broadagreement with Greece on the account; “at this point it’s down to technical questions,” Kothe told reporters.
As the clock ticks toward March 20, when Greece is due to pay off14.5 billion euros of maturing debt, euro-area officials are scrambling to align competing schedules with a private- sector bond swap designed to slice about 100 billion euros off Greece’s debt.
Swap Window
Officials are targeting a window of Feb. 22 to March 9 to complete the swap transaction, German lawmakers were told during a briefing last week by government officials. The swap would then begin by March 8 at the latest and be completed by March 11, according to state-run Athens News Agency. A successful debt swap would mean that Greece won’t have to repay in full the March 20 bond.
Still, the exchange can only proceed once governments authorize funds to be used in cash or collateral as an incentive to investors. The Finnish Finance Ministry said today that final approval for the whole Greek package is “likely” to come in the week of March 12.
Compounding the issue is the role of the ECB and the Greek bonds it has accumulated over the course of the crisis. The Frankfurt-based central bank is holding talks on exempting Greek bonds in national central banks’ investment portfolios from a debt restructuring, two euro-area officials said last week.
The ECB is swapping its Greek bonds for new ones to ensure that it won’t be forced to take losses in any debt restructuring, three euro-area officials said on Feb. 16. The move may be completed today, the officials said.
Collective-Action Clauses
Greece is drawing up legislation that could be used to impose losses on investors who don’t support the debt swap, according to two euro-region officials familiar with the situation. Finance ministers are prepared to back the use of so- called collective-action clauses if the voluntary swap doesn’t draw enough participation, one of the officials said.
Meanwhile, questions have swirled on whether austerity and outside financing measures being undertaken will manage to stave off a Greek collapse. The Greek economy shrank 7 percentin the fourth quarter from a yearearlier as unemployment surgedpast 20 percent in November. The country’s output is forecast to shrink for the fifth straight year.
Debt Goals
Euro-area ministers heard on a Feb. 15 conference call that without further measures, Greece will miss debt-reduction goals. Outstanding debt would fall to 129 percent of gross domestic product in 2020, missing a targeted 120 percent, according to three people familiar with the talks.
German Finance Minister Wolfgang Schaeuble signaled flexibility on the target, saying inStuttgart on Feb. 17 that “the 120 percent may be 122 percent or 123 percent, it mustn’t be 130percent.”
Before he flew to Brussels, Papademos said his governmenthad identified the cuts necessaryto lower spending by 325 million-euros, offering more guaranteesthat Greece will fulfill its side of the bargain.
“A euro exit by one member could fundamentally change the nature of the euro as an irreversible currency and spark an unprecedented run on banks and sovereigns,” Joachim Fels , chief economist at Morgan Stanley, wrote in a note to clients yesterday.
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MCX OPERATOR

Learning part for Beginner (Trader)

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A few traders nervous to stay in the market overnight, while others may stay in for a year or more. Every person must find the type of trading that suits his or her personality. Anyone who is not sure about this must do a lot of personal analysis and study until he/she knows what he/she likes best. Below definitions is for non-spreading speculators who may trade various lengths of time. Part of being a first-class trader is knowing how long to stay in a trade. A lot of help is give below by some useful Definitions for beginner.

DEFINITIONS

Acceleration: rate of change in speed of force or power.

Amplitude: change up and down in price.

Balance point: pivotal and critical price of the market.

Bear: Market going downstairs.

Break-out: overcoming resistance, mainly from a blocking area.

Bull: Market going upstairs.

Congestion: uneven price range.

Climax day: daily reversal pattern having long and closing near the high (or low) for the daylight.

CFTC: Commodity Futures Trading Commission.

Cycles: returning price changes of one and the same time spans.

Dow Theory: higher highs with higher lows, or lower higher lower lows from previous swing, indicating change of direction.

Fib: abbreviation for Fibonacci.

Flop over: a new parallel, same width as previous channel.

Fourier: high math method.

Gap: an opening left on price charts. A gap is where there would be turning point. The force of the market causes price to jump over this normal pivot spot. For this reason, lines through gaps are considered as through turning points.

Inside day: a day with both the high and the low between the previous day;’s high and low.

Leg: same as swing, a distance between two pivots or turning points of the market.

Labored move: price pattern confined to a slanting narrow channel.

Moving average: method of filtering or smoothing price action.

Momentum: HAP will use momentum and acceleration as synonyms. The mass generally associated with momentum is the bullish consensus behind a move.

Odds: percent of expected change of the market price.

Outside day: a day with both high and low beyond the previous day’s high and low.

Pivot: reversing or change of direction or same as turning point.

Price action: commodity price movement, on graphs, for a day or some other time period.

Range: also called thrust, swing or leg. It is the distance between two pivots.

Resistance area: place where price meets a lot of buying or selling and stalls in its thrust.

Runaway market: fast move of price in one direction.

Shake-out: stops being run, but with no continuation. A false break-out.

Short covering or long covering: changing from a position, which entails getting twice the amount if reversing.

Support area: same as resistance area, except they each are at opposite sides of buying or selling pressure.

Swing: distance between two pivots.

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MCX OPERATOR

REPO RATE and REVERSE REPO RATE

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What is Repo Rate and Reverse Repo Rate?

A Repo is a item of money market. Generally, Reserve Bank and Commercial Banks engage in repo transactions but not limited to these two. Individuals, banks, financial institutes can also engage in Repo. It is also know as Repurchase Agreement.
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The rate at which the RBI gives money to commercial banks is called Repo Rate. This item is of monetary policy. When banks have any shortage of funds they can borrow from the RBI. So, Repo rate is interest rate which is less than Bonds as the borrowing is collateral.

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A reducing in the repo rate benefits banks get money at a cheaper rate and vice versa. The repo rate in India and same as the discount rate in the US.

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Reverse Repo rate is simply the rate at that the RBI borrows money from commercial banks. Banks are always happy to lend money to the RBI since their money are in safe and secure hands with a good interest. An additional, reverse repo Reserve Bank borrows money from banks by lending securities. The interest paid by Reserve Bank in this case is called reverse repo rate.
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MCX OPERATOR


CRR and SLR Definition :- Learning part

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Cash Reserve Ration (CRR Definition)
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It’s the low percentage of amount that each bank has got to deposit to the RBI. If RBI chooses to improve the portion of the, the accessible amount with all the banks boils down. RBI is using this way (increase of CRR rate), to drain out the excessive cash within the banks.
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With regard to Example:
Banking companies are required to keep a percentage of their deposits as cash, meaning that in the event you deposit Rs. 100/- in your bank, consequently bank cannot make use of the whole Rs. 100/- for lending or investment cause. They need to keep a part associated with the deposit as cash and may use just the remaining amount for lending/investment. This minimal percentage that is based on the central bank is referred to as Cash Reserve Ratio.


What is Statutory Liquidity Ratio (SLR Definition)
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SLR (Statutory Liquidity Ratio) is the money a commercial bank needs to preserve in the form of cash, or gold or government authorized securities (Bonds) before providing credit to their own customers. SLR rate is decided by the RBI (Reserve Bank of India) as well as to control the expansion of bank credit.
The maximum limit of SLR is 40% and minimum limit of SLR is 24%. It’s 26 now. This limitation is added by RBI on banks to make funds available to customers on demand at your earliest convenience. Gold and G Secs (or Gilts) are included along with cash because the two are highly liquid and secure assets.
The RBI can increase the SLR to contain inflation, suck liquidity in the market, to tighten the measure to protect the customers’ money. In a growing economy banks would probably like to invest in stock market, not in G Secs or Gold as the latter would yield less returns. Another reason why is long term G Secs (or any bond) are sensitive to interest rate changes. But in an emerging economy interest change is a usual activity.
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MCX OPERATOR
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Stock Market & Exchange NSE with Dow Jones

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What is the Stock Market?
Most commonly talking the Stock Market refers to equities where actually stocks and derivatives are traded. In the India, we say the Stock Market is New BSE Or NSE. In fact there are major Stock Markets in Hong Kong, Hamburg, London, Paris, Canada, Japan and others that have an impact on each other and impact the world Stock Market.
National Stock Exchange(NSE) is found at Bombay, India. It is the 16th largest stock Market globally by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions.
Scenario about About USA and other Stock Exchange:
The Fresh New York Stock Market may have stocks indexed which are indexed on various significant Stock Markets. A company headquartered in Amsterdam can be recorded on multiple stock markets. Many foreign organized companies are listed on the New York Stock Trading Game.  You will find a tremendous value for unknown firms that can be for auction on an exchange while in the U.S. The publicity and knowledge of a foreign firm owns a face on a Ny Stock Market. 
An instance is going to be China stock Baidu.  These info and check technology firm has  grown in extreme measures as it was introduced upon the New York State Market.  Sometimes can be found coming up with a good impression to stockpile analysts and also a wonderful review by key visitors to give the mysterious firm an increase. 
View of the market currently is its in the world integration of investors, companies and alliances that creates an unprecedented dynamic. To date this United Countries among the financial markets has yielded an unspoken treaty of like heads. The fundamental goal requires you to build a win-win example for everybody worldwide players from the Stock Market.  
Any investor wherever placed may hold a substantial stake in almost any provided equity regardless of where the equity is exchanged.  The Stock Exchange will be very large professional association that everybody can join with all the only admission ticket may perhaps be the cost of a unmarried share of stock.   
The idea equity have to be broadly interpreted. There are equities which involve the manufacturing of treatments and products, but a product is definitely intellectual or an entity like insurance.  Banks are equities and financial brokers are exchanged found on the different exchanges.  An angel investor might own gold stocks, mining firms and equities that package these equities correct into a corporate institution.  The only limitation is when the broker is interested in Having the commodity or trading throughout the futures market the Chicago Mercantile or another commodities exchanges can be the investing tool.
Put differently you are likely to own a bank as a possible equity and also require bonds or other professional paper that may likely trade upon the commodities exchanges, nevertheless, you can’ t get hold of commodity to be a stock. If you require a commodity like wheat, currency, corn, gold, silver or the such as you may need to look the actual commodities market.  
In the world the brand York Stock Exchange is composed of the NASDAQ, NYSE and also the newly built mixture of the NYSE Group with Euronext in April, 2007. The Euronext holding business is the phenomenal synergy between Paris as well as NYSE whose history goes back to 1792. 
The Euronext definitely a biochemistry combined with derivatives, currency and equities to mention a test of goods.  There are more exchanges that include the AMEX. You’ll discover listing requirements almost every within the exchanges.  The Stock Exchange is absolutely a destination where customers and seller of the part of a company get together as well as in consumer credit card debt the organization hopefully raises some cash or any other appreciate.
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MCX OPERATOR

DOW JONES & NASDAQ :- Learning Part

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                   What is the dow jones index and definition
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What is definition of the Dow Jones Industrial Average?
The Dow Jones Industrial Average (DJIA), is the top THIRTY Blue Chip stock as their performance is averaged each day of trading on the stock market. The workings of the Dow Jones Industrial Average reads like a who is who in the stock market.
Generally, the top 30 stocks are doing truly effectively on the stock market. Due to the small number of stocks that make up the DJIA all it takes it a few of the stocks to take hitting down and the overall average can take a dip. It is good to analyze the sectors that make up the components of the Dow Jones Industrial Average.
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Financial Stocks in the Dow Jones Industrial Average
acThis last cluster possesses a significant impact during the financial globe. It would have any contact with actual angst while in the stock exchange, however, many are well placed to get rocky road.  A very stellar include, American International Group Inc. (AIG), American Express Organization, JP Morgan & Chase & Organization, and Citigroup Inc.
This groups impact on the actual Dow-Jones Industrial Average Commercial Average is apparent.  Several of the ripple effect of concerns about cash equivalent as well as the real estate mortgage market will influence this groups impact.  It is going to depend on if the concerns could expand to go to the professional real estate market and the extent for the defaults and foreclosures.
With the top 30 compounds that define the Dow-Jones Industrial Average Industrial Average. As you have seen the entire rise and fall of little percentages in this type of market indicator ingests a nearer examine the components and fields.
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Find more information about below factors which are associated with Dow-Jones Industrial Average.
  • Direct consumer contact stocks in Dow Jones Commercial Average
  • Development stocks within the Dow-Jones Industrial Average Industrial Average
  • Large Multi-National stocks the particular Dow Jones Industrial Average
  • Financial Stocks belonging to the Dow-Jones Industrial Average Commercial Average



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What is the NASDAQ Exchange?
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The NASDAQ Exchange is a limited liability company and a corporation which gives a means for traders to execute stock orders for stock brokers, institutional investors and on-line stock purchasers.  The NASDAQ Exchange was created in 1971 by the National Association of Securities Dealer to fill a need for exposure stocks that were not a good fit in the regular stock exchange. The NASDAQ reports on over the counter stocks for thousands of stocks not listed on the other exchanges.  By the 1990s NASDAQ surpassed in terms of listings the AMEX Exchange.
In order to trade on the NASDAQ the trader and members must be certified and agree to the by laws of NASDAQ Inc.  In 1999 NASDAQ merged with AMEX to form the NASDAQ-Amex Group.  By 2000 the National Association of Securities Dealers sold their interest in NASDAQ to private investors.  
NASDAQ operates similar to every business, these include Articles of Incorporation, Business Officers, By Laws and holds meetings.  The NASDAQ LLC. is composed of regulating deck as well as in its destination has rules and procedures it operates under.  With this quasi-governmental status of NASDAQ the Securities and Exchange Commission gives the character to generate favorable NASDAQ operates counting on advantageous practices and procedures.  Inside company engages in inside trading, fraudulent reporting of organization earnings and assets or the several patches of unfavorable practices governed through the Securities Act of 1934, the Commission will place ahead sanctions and treatments of those functions.  Likewise, state attorney generals and then the U.S. Attorneys might bring actions in the courtroom to cure and desist these damaging functions well as acquire for violent sanctions.   
A individual favorite of USA is Intel. In aspect as it is a function horse on the development sector and in element because I read and preferred Tom Wolfe’s book upon the bosses structure in Starting.  All this wasn’t a biography, even so it did parallel the firm of the egalitarian workplace.  The stock sells during a selection of $25 and gives under the ticker INTC. 
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MCX OPERATOR

Sunday, 19 February 2012

CHINA'S RRR UPDATE

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The Publlic Bank Of China delivered a 50-basis-point cut in banks' reserve requirement ratio (RRR), effective from next Friday, Feb. 24, after repeatedly defying market expectations for such a move.

It would cut the RRR for the biggest banks to 20.5% from 21%, injecting an estimated 400 billion yuan ($63.5 billion) into the banking system that could be used for lending.

It's not a big surprise. Although Chinese leaders stress policy stability, an RRR cut is necessary. Trade and monetary data in January pointed to some downward pressure on the Chinese economy.

But policy easing will be gradual given the central bank sounded cautious about inflation in its fourth-quarter monetary policy report.China's once turbo-charged economy is likely to slow to 8.2% in the first quarter from 8.9% in the previous quarter.. Good news for Stocks and Metals Traders...
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MCX OPERATOR

Friday, 17 February 2012

POSITIONAL BULLION'S

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y'day we had recommended buy silver @ 55555-620 with tgt 56666 made high 56499...almost tgt done. cool 900 points.

y'day we had recommended buy GOLD @ 28030-55 with tgt 28230-55 made high 28205...almost tgt done. cool 150 to 170  points.

27000+15000= 42000/- and for your knowledge positional calls are free of cost on every package.

join us:-
"We will show you how to buy at low and sell at high"
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MCX OPERATOR


Important Updates

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ECB agrees to help out Greece by contributing to bailout package!

Euro not to be under pressure now! as European governments consider cutting interest rates on emergency loans to Greece!

Gold has moved in the range between $1,700 and $1,760 since the beginning of the month! Any good news from Greece is bound to push gold up!

Silver all smiles! Spot silver edged up 0.2 percent to $33.52, off a three-week low of $32.64 hit in the previous session. The metal remained the top performer of the complex with a 21 percent year-to-day climb.

Time to Trade in Euro! Euro stood at $1.3132, after bouncing off a three-week trough around $1.2973. It found good support at $1.2975, the 50 percent entrancement of the $1.2623-1.3321 move.
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MCX OPERATOR
www.mcxoperator.com

Thursday, 16 February 2012

BEST TRADE DAY OF THE WEEK

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Best trade of the week,
we bought silver @ 55555-55620.
Gold buy given @ 28050
in morning session silver bought @56100 when it made low 56085 and booked after 56350 .
Natural gas we bought @ 120.5-8.
Gold sell given @ 28190-210.
gold bought @ 28110-20 when it made low 28101.
although this Thursday rocked.
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MCX OPERATOR
www.mcxoperator.com

News Update

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WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke on Thursday told community bankers that he recognizes that the central bank’s low interest rates hurts their profitability, but he added that the policy is necessary to drive the economic recovery.
“A common complaint on the part of some community bankers is that very low interest rates hurt their profitability by squeezing net interest margins,” Bernanke told community bankers at a Federal Deposit Insurance Corp. conference in Arlington, Va. “It is necessary to set the negative effects on net interest margins against the positive effects of a strengthening economic and lending environment.”
The central bank chairman also acknowledged concerns among small bankers that the Fed’s examiners have been too tough, hurting their ability to lend.
“In particular, we recognize that new regulations and supervisory requirements may impose disproportionate costs on community banks, which have smaller staffs and less-elaborate information systems than larger banking organizations,” he said.
However, Bernanke argued that Fed supervisors must insist on high standards for lending, management and governance as a means of protecting banks from a “race to the bottom” and the creation of more problems down the road. Banks can make multiple appeals of supervisory decisions, he added.
Bernanke added that despite some recent signs of improvement, the recovery has been frustratingly slow, constraining opportunities for profitable lending. He said small banks must manage concentration risk that comes from too much specialization in a particular category of lending.
Finally, the central bank chairman argued that community banks close ties to local economies is a source of strength, but it also has its drawbacks as an institution can be overly exposed to a local economy.
”The fortunes of communities and their banks tend to rise and fall together‘ he said.
Community banks must also manage concentration risks arising from their specialization in certain categories of lending
The comments come after Bernanke on Friday made a renewed push for programs to convert foreclosed homes into rental units to help revive the housing market. Read about how Bernanke renews push for foreclosed rentals
More from this author:
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twitter.com/rorol
• See Ron Orol's stories on MarketWatch
On Friday he also suggested programs to create so-called “land banks,” which have the ability to purchase and sell real estate. He said these land banks could buy and rehabilitate foreclosed homes and convert them into rentals. He added that land banks are a “promising” option but the few that exist lack the resources to keep pace with the number of low-value U.S. properties.
In that speech, the central bank chairman reiterated his concerns about so-called “underwater” homeowners who are current on their mortgages, but because they have little or no equity in their homes, they cannot refinance to current low interest rates. 
Ronald D. Orol is a MarketWatch reporter, based in Washington.--MCX OPERATORwww.mcxoperator.com