* Economic divergence within the Eurozone weighing on the Euro.
Although getting close to oversold by now, Eur/Usd has probably topped out this time around.
* Heavy snow and minus 9C means real winter for Xmas for a change.
I love it. Been intermittent writing for a while now.
Been quite busy and regrettably I have had to make the choice to scale down on the writing. However, Im aiming to increase the frequency. Ill revert tommorrow.
As ususal - good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
21 December 2009
27 November 2009
Neighbour bailout for Dubai around the corner? Either way, continued volatility is the conclusion.
* Dubai world bailout in the offing?
Markets should be in for some good volatility near term as the question of Dubai World will reach a conclusion. Since bailouts are all the rage these days, I have to hold that as the most likely outcome.
If not, well then we should see further pressure on Usd and Gbp funded assets.
Since the Usd has taken over the role as the worlds premier funding currency ahead of the Jpy, albeit with fierce competition from several other currencies in the low yielder category, I guess most assetclasses should be affected under such a scenario.
*Dubai and the Turkey connection - is there one?
Unless my recollection is incorrect, I believe a not irrelevant part of Turkey funding flows stems from this area. Please doublecheck me on it though. The Usd/Try spot reaction yesterday seemed to indicate something out of the ordinary anyway. With skepticism arising re the current governments intentions to initiate and follow an IMF led program, the TRY is increasingly vulnerable. Perhaps not in Dec, but in the New Year.
*Other fixed currency regimes favoured by the markets hot money should pay attention to the Dubai situation
China being a case in point. Fixed exchangerates, undervalued currencies, hot money flooding in as a consequense, hefty misallocation of capital, leading increasing degree of loony investments as a consequence. It happened in Dubai, it is happening in China - for sure.
The scale of the Chinese misallocation process is of course gigantic.
Hopefully it will not unravel nearterm,,,
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
Markets should be in for some good volatility near term as the question of Dubai World will reach a conclusion. Since bailouts are all the rage these days, I have to hold that as the most likely outcome.
If not, well then we should see further pressure on Usd and Gbp funded assets.
Since the Usd has taken over the role as the worlds premier funding currency ahead of the Jpy, albeit with fierce competition from several other currencies in the low yielder category, I guess most assetclasses should be affected under such a scenario.
*Dubai and the Turkey connection - is there one?
Unless my recollection is incorrect, I believe a not irrelevant part of Turkey funding flows stems from this area. Please doublecheck me on it though. The Usd/Try spot reaction yesterday seemed to indicate something out of the ordinary anyway. With skepticism arising re the current governments intentions to initiate and follow an IMF led program, the TRY is increasingly vulnerable. Perhaps not in Dec, but in the New Year.
*Other fixed currency regimes favoured by the markets hot money should pay attention to the Dubai situation
China being a case in point. Fixed exchangerates, undervalued currencies, hot money flooding in as a consequense, hefty misallocation of capital, leading increasing degree of loony investments as a consequence. It happened in Dubai, it is happening in China - for sure.
The scale of the Chinese misallocation process is of course gigantic.
Hopefully it will not unravel nearterm,,,
* New positions and positionchanges
- Took profit on half of the equity index puts sold yesterday, sold equity index calls today.
- Took profit on my SKF ETF on the US open
- Took profit on my long Eur/Sek
As usual, good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
26 November 2009
Eur/Usd in Dec; repatriation flows to kick in - watch out in the new year.
* With the European credit plug firmly in place - the Euro economy does not look promising
PIIGS countries - say no more.
Portugal, Italy, Ireland, Greece and Spain,,,,,, Were they not Euro members, their CDS´s would remind you more of Ukraine and the Baltics than anything else.
These countries are all in deep trouble and the cavalry (credit) is not seen anywhere.
The German Landesbanken are all in dire straits as well.
Hence, I believe we are likely to see a repeat of last year with regards to Eur/Usd, a massive repatriation surge in December as net foreign assets are trimmed down in favour of balance sheet restoration and a "change of plans" for business strategies. Ie increasingly domestically focused.
Once the new years out the way however,,,, helmets on. High risk for sharply lower Eur and ditto equity markets.
Due to the fixed exchangerate, deflationary forces in fex Greece will push local creditspreads straight up, generating defaults and writedowns of banks loanbooks. Greece and other EMU countries in a similar situation have created their problems in a very similar way as Argentina and the Baltics did; too high domestic consumption, nonproductive investment, leverage and debt against too low investment into the supplyside of the economy.
* The ECB is signalling an end to the quantitative easing.
Apparently, they are concerned that "there may be too much liquidity in the system" hmmmm,,, really? Well, of course there is, but I thought that was part of "the plan". Or is there no plan? Well, with one year money supply growth falling from 14% to almost zilch in a year, it would seem too early to withdraw any quantitative easing.
However, I guess the ECB is looking at the misallocation effects beyond the assetmarkets. Greece is currently building up a fiscal deficit stretching imagination. Explaining why the Greek CDS is now at 195 ish points, = at par with Turkey´s CDS. Difference is, as mentioned earlier, were it not for the Euro, that Greek CDS would be 3 - 4 times higher,,,
European corporate balancesheets are still weakish, industrial production sluggish and the creditplug still firmly in place. Conclusion; ECB is walking a tight rope. If they follow through on this I will be looking to dump European assets; Equities; bankstocks, any other corporate with high debt and weak cashflow, weak balancesheet the Euro etc.
With Europe and the rest of the world heavily on steroids, why stop now? Better late than never, maybe. ECB is caught between a rock and a hard place, whatever they choose there will be difficulties.
* The Dubai world
On top of this we have the "Dubai world" problems. This will have repercussions on the UK and US realestate markets as capital is consolidated. As if the Gbp needed more trouble,,,, Noone should be surprised that the excessive project in Dubai is in dire straits, but this is obviously not good news. It will not help credit, cyclical currencies or corporates.
* Weaker Usd = higher assetmarkets still?
I doubt it. If we talk fiscal consolidation and add Dubai on top of it there is risk of choppy markets. Volatility should increase. This xmas might be a good one to be long vol in order to get nice presents from Santa. If we see fiscal consolidation from investors a weaker Usd will mean a weaker equity market as well.
* New positions and position changes
- Short Equity index Calls for Dec, closed them today for a quick profit. Sold puts. Looking to resell Calls, close puts on any rebound higher. Obviously looking for one.¨
- Long Eur/Usd
- Long Eur/Gbp
- Long SKF ETF
- Long XACT BEAR ETF
- Long Eur/Sek
As usual, good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
PIIGS countries - say no more.
Portugal, Italy, Ireland, Greece and Spain,,,,,, Were they not Euro members, their CDS´s would remind you more of Ukraine and the Baltics than anything else.
These countries are all in deep trouble and the cavalry (credit) is not seen anywhere.
The German Landesbanken are all in dire straits as well.
Hence, I believe we are likely to see a repeat of last year with regards to Eur/Usd, a massive repatriation surge in December as net foreign assets are trimmed down in favour of balance sheet restoration and a "change of plans" for business strategies. Ie increasingly domestically focused.
Once the new years out the way however,,,, helmets on. High risk for sharply lower Eur and ditto equity markets.
Due to the fixed exchangerate, deflationary forces in fex Greece will push local creditspreads straight up, generating defaults and writedowns of banks loanbooks. Greece and other EMU countries in a similar situation have created their problems in a very similar way as Argentina and the Baltics did; too high domestic consumption, nonproductive investment, leverage and debt against too low investment into the supplyside of the economy.
* The ECB is signalling an end to the quantitative easing.
Apparently, they are concerned that "there may be too much liquidity in the system" hmmmm,,, really? Well, of course there is, but I thought that was part of "the plan". Or is there no plan? Well, with one year money supply growth falling from 14% to almost zilch in a year, it would seem too early to withdraw any quantitative easing.
However, I guess the ECB is looking at the misallocation effects beyond the assetmarkets. Greece is currently building up a fiscal deficit stretching imagination. Explaining why the Greek CDS is now at 195 ish points, = at par with Turkey´s CDS. Difference is, as mentioned earlier, were it not for the Euro, that Greek CDS would be 3 - 4 times higher,,,
European corporate balancesheets are still weakish, industrial production sluggish and the creditplug still firmly in place. Conclusion; ECB is walking a tight rope. If they follow through on this I will be looking to dump European assets; Equities; bankstocks, any other corporate with high debt and weak cashflow, weak balancesheet the Euro etc.
With Europe and the rest of the world heavily on steroids, why stop now? Better late than never, maybe. ECB is caught between a rock and a hard place, whatever they choose there will be difficulties.
* The Dubai world
On top of this we have the "Dubai world" problems. This will have repercussions on the UK and US realestate markets as capital is consolidated. As if the Gbp needed more trouble,,,, Noone should be surprised that the excessive project in Dubai is in dire straits, but this is obviously not good news. It will not help credit, cyclical currencies or corporates.
* Weaker Usd = higher assetmarkets still?
I doubt it. If we talk fiscal consolidation and add Dubai on top of it there is risk of choppy markets. Volatility should increase. This xmas might be a good one to be long vol in order to get nice presents from Santa. If we see fiscal consolidation from investors a weaker Usd will mean a weaker equity market as well.
* New positions and position changes
- Short Equity index Calls for Dec, closed them today for a quick profit. Sold puts. Looking to resell Calls, close puts on any rebound higher. Obviously looking for one.¨
- Long Eur/Usd
- Long Eur/Gbp
- Long SKF ETF
- Long XACT BEAR ETF
- Long Eur/Sek
As usual, good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
29 September 2009
European creditplug remains, expect a stronger Euro towards the end of the year, near term it looks soft though.
* European financial sector repatriation a theme towards the end of the year
European creditgrowth has imploded over the last six months, hence, net external assets are likely to decline.
Meanwhile, financialmarkets yieldhunting is growing as steep yieldcurves and lower volatilities forces funds into assetmarkets in order to generate any return whatsoever. Highest yield wins, (currently) no matter (almost) what. Quality of the asset currently seems to be of second order importance.
To some extent it is understandable. The Centralbanks liquiditygates remains open. (With RBA the current exception, sending signals of a ratehike this fall.) Centralbankers are acutely aware of that the current rise in assetmarkets is a function of Centralbank liquidityflooding.
The Centralbankers current one (and only) plan for now is for this flooding to float crappy assets too, bringing collateral and balancesheet relief to the financial sector in the process.
Since March, US investors have stopped repatriating assets and has since seeked higher yielding investments away from the Usd. 9.5 Trn Usd still remains on the US sidelines yielding zilch. Hence, continued outflows are to be expected.
* Assetmarkets and Eur/Usd to benefit towards the end of the year
With the German election over, I expect the Landesbanken consolidation to shift up a gear or two. The seven Landesbanken will likely be consolidated into two or three only. This means consolidation of assets and a likely refocus on domestic biz only. Hence I expect some selling and repatriation of foreign assets, benefitting the Euro towards the end of the year.
This, combined with shaky European financial balancesheets and US investors shifting assets abroad, spells a higher repatriationled Eur/Usd theme towards the year end. Higher assetmarkets and continued yieldhunting should follow. As Ive mentioned in previous notes though, the JPY should remain strong "no matter what". Not for the USD and the GBP though, as these are the new funding currencies of the world.
To top it off, the ERBD has asked for a 10BN Usd increase from its member states, funds to be spend on the CEE economies. This equals an increase of ERBD;s equity by 50%. More handouts.
*Risks on the rise - but they will likely be allowed to build for a while still
Near term threats could cause some turbulence
The current developments are obviously increasing financial risks. Especially as consensus is increasingly viewing this as a sustainable recovery. Equityvaluations are quite high (not a problem if one believes the sustainable recovery theme,) China´s 60th revolution celebration on 1 Oct could be the startingpoint for a tighter creditpolicy. This is obviously something to monitor.
Once this fairytale turns on its head, the velocity might surprise a few.
* New positions and positionchanges
- Took profit on my long Gbp/Usd puts.
- Took profit on my long Gbp/Jpy puts.
- Took profit on my long Nok/Sek spot.
- Stopped out of my long Eur/Chf spot, Eur calls expired OTM
- Stopped out my remaining long Usd/Zar spot.
- Stopped out of my long ETF SKF
Currently no positions
As usual, good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
European creditgrowth has imploded over the last six months, hence, net external assets are likely to decline.
Meanwhile, financialmarkets yieldhunting is growing as steep yieldcurves and lower volatilities forces funds into assetmarkets in order to generate any return whatsoever. Highest yield wins, (currently) no matter (almost) what. Quality of the asset currently seems to be of second order importance.
To some extent it is understandable. The Centralbanks liquiditygates remains open. (With RBA the current exception, sending signals of a ratehike this fall.) Centralbankers are acutely aware of that the current rise in assetmarkets is a function of Centralbank liquidityflooding.
The Centralbankers current one (and only) plan for now is for this flooding to float crappy assets too, bringing collateral and balancesheet relief to the financial sector in the process.
Since March, US investors have stopped repatriating assets and has since seeked higher yielding investments away from the Usd. 9.5 Trn Usd still remains on the US sidelines yielding zilch. Hence, continued outflows are to be expected.
* Assetmarkets and Eur/Usd to benefit towards the end of the year
With the German election over, I expect the Landesbanken consolidation to shift up a gear or two. The seven Landesbanken will likely be consolidated into two or three only. This means consolidation of assets and a likely refocus on domestic biz only. Hence I expect some selling and repatriation of foreign assets, benefitting the Euro towards the end of the year.
This, combined with shaky European financial balancesheets and US investors shifting assets abroad, spells a higher repatriationled Eur/Usd theme towards the year end. Higher assetmarkets and continued yieldhunting should follow. As Ive mentioned in previous notes though, the JPY should remain strong "no matter what". Not for the USD and the GBP though, as these are the new funding currencies of the world.
To top it off, the ERBD has asked for a 10BN Usd increase from its member states, funds to be spend on the CEE economies. This equals an increase of ERBD;s equity by 50%. More handouts.
*Risks on the rise - but they will likely be allowed to build for a while still
Near term threats could cause some turbulence
The current developments are obviously increasing financial risks. Especially as consensus is increasingly viewing this as a sustainable recovery. Equityvaluations are quite high (not a problem if one believes the sustainable recovery theme,) China´s 60th revolution celebration on 1 Oct could be the startingpoint for a tighter creditpolicy. This is obviously something to monitor.
Once this fairytale turns on its head, the velocity might surprise a few.
* New positions and positionchanges
- Took profit on my long Gbp/Usd puts.
- Took profit on my long Gbp/Jpy puts.
- Took profit on my long Nok/Sek spot.
- Stopped out of my long Eur/Chf spot, Eur calls expired OTM
- Stopped out my remaining long Usd/Zar spot.
- Stopped out of my long ETF SKF
Currently no positions
As usual, good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
25 September 2009
Sterli´n is a falli´n
* GBP is currently the premier punchingbag amongst currencies
Why?
- UK interestrate expectations are heading lower, the yield vs Gbp/Usd correlation looks set to increase again.
- BOE Governor King does not seem the least concerned about the recent Gbp weakness, neither should he. A weaker Gbp will be a crucial part of the BOE strategy going forward, as domestic consumption is set to fall further while corporate balancesheets will remain weak, despite the pumping up of assetmarkets. Exports will be crucial.
Being first in the game of competitive devaluations could be an advantage. However, international friction should be on the rise.
* New positions and positionchanges
- Took profit on my short Gbp/Nok after 3%.
- Took half profit on my long Usd/Zar
- Added to my long Nok/Sek
As usual, good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
Why?
- UK interestrate expectations are heading lower, the yield vs Gbp/Usd correlation looks set to increase again.
- BOE Governor King does not seem the least concerned about the recent Gbp weakness, neither should he. A weaker Gbp will be a crucial part of the BOE strategy going forward, as domestic consumption is set to fall further while corporate balancesheets will remain weak, despite the pumping up of assetmarkets. Exports will be crucial.
Being first in the game of competitive devaluations could be an advantage. However, international friction should be on the rise.
* New positions and positionchanges
- Took profit on my short Gbp/Nok after 3%.
- Took half profit on my long Usd/Zar
- Added to my long Nok/Sek
As usual, good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
24 September 2009
The toiletshaped recovery
* Will the recovery be in the form of a L, V, W, I or a Nike swoosh sign? Lets add the toiletshaped recovery to the list.
Assetprices had better stay pumped, bringing relief to fragile balancesheets or this "recovery" will be flushed down the toilet. This is a real and present danger. Important to remember in the midst of the tallyho- party - drunkedness.
Many assetclasses now seem to indicate a move lower. Im putting some positions on that way.
G20 this weekend and expectations are set for a continuation of the asset rally next week. Im buying front end vol. The Chinese 60th revolution anniversary is set for 1st October. Post it a probability for a decrease in Chinese efforts to pumpmarkets should increase. Im buying front end vol.
* G20 in Pittsburg
US; Increase banks capitalratios. Makes sense. If authorities control bank`s leverage, they will control payouts as well.
Europe; global legislation re bonuses. Smoke and mirrors.
Only reason European finance ministers cant follow in the footsteps of the US suggestion;
The shape of the European banks. So far they have done way less in terms of refinancing and the remaining financing need remains about twice as high for the European financial sector.
The European financial system would not be able to cope with higher capitalratios, simple as that, and the finance ministers are acutely aware of it.
European banks wont have to write off their meat - and potato- bad loans to households and corporates til those loans are defined as nonperforming loans. US banks have already done substantial writeoffs as subprime and related markets went down the drain. To a certain
extent they had to. These were traded financial instruments. The European financial sector did not have this exposure, hence, not alot of writeoffs.
Exposures are on a gigantic scale still, although meat and potato. If you cook meat and potato with high enough leverage, it eventually runs the risk of turning into something very toxic.
Meanwhile European politicians are helping out by moving the goalposts during the game by vastly increasing the timespan before a bad loan has to be classified as a non performing loan and assets have to be written off.
Austria being the latest case in point.
This is one big game of liar`s poker, lets hope unemployment comes down soon and that real growth kicks in once the global stock refill is completed. Theres not much ammo left for policymakers at this stage.
* The remaining strategy
Only remaining global policymaker strategy is this; pump those assetmarkets further and higher by keeping quantitative easing in place. This will bring balancesheetrelief to the financialsectors that need it (households too). This will release the liquidity plug. How to handle the following velocity of the monetary base? By tightening like crazy. With unemployment still rife. Good luck.
On the other hand, economies could just fall into recession again. Hmmm,,,,,
The European bonus regulation talk is merely opportunistic chatter. Wouldnt hold my breath on that one leading anywere. As is, unfortunately, standard procedure when it comes to European initiatives on the international scene. Pick your subject.
* Position changes and new positions
- Deltahedged my long Gbp/Usd puts as spot crossed the strike.
- Bought lower delta Gbp/Usd puts.
- Bought Usd/Zar spot
- Bought Usd/Pln spot
- Sold Gbp/Nok spot
- Bought Nok/Sek spot
- Bought SKF ETF
As usual, good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
Assetprices had better stay pumped, bringing relief to fragile balancesheets or this "recovery" will be flushed down the toilet. This is a real and present danger. Important to remember in the midst of the tallyho- party - drunkedness.
Many assetclasses now seem to indicate a move lower. Im putting some positions on that way.
G20 this weekend and expectations are set for a continuation of the asset rally next week. Im buying front end vol. The Chinese 60th revolution anniversary is set for 1st October. Post it a probability for a decrease in Chinese efforts to pumpmarkets should increase. Im buying front end vol.
* G20 in Pittsburg
US; Increase banks capitalratios. Makes sense. If authorities control bank`s leverage, they will control payouts as well.
Europe; global legislation re bonuses. Smoke and mirrors.
Only reason European finance ministers cant follow in the footsteps of the US suggestion;
The shape of the European banks. So far they have done way less in terms of refinancing and the remaining financing need remains about twice as high for the European financial sector.
The European financial system would not be able to cope with higher capitalratios, simple as that, and the finance ministers are acutely aware of it.
European banks wont have to write off their meat - and potato- bad loans to households and corporates til those loans are defined as nonperforming loans. US banks have already done substantial writeoffs as subprime and related markets went down the drain. To a certain
extent they had to. These were traded financial instruments. The European financial sector did not have this exposure, hence, not alot of writeoffs.
Exposures are on a gigantic scale still, although meat and potato. If you cook meat and potato with high enough leverage, it eventually runs the risk of turning into something very toxic.
Meanwhile European politicians are helping out by moving the goalposts during the game by vastly increasing the timespan before a bad loan has to be classified as a non performing loan and assets have to be written off.
Austria being the latest case in point.
This is one big game of liar`s poker, lets hope unemployment comes down soon and that real growth kicks in once the global stock refill is completed. Theres not much ammo left for policymakers at this stage.
* The remaining strategy
Only remaining global policymaker strategy is this; pump those assetmarkets further and higher by keeping quantitative easing in place. This will bring balancesheetrelief to the financialsectors that need it (households too). This will release the liquidity plug. How to handle the following velocity of the monetary base? By tightening like crazy. With unemployment still rife. Good luck.
On the other hand, economies could just fall into recession again. Hmmm,,,,,
The European bonus regulation talk is merely opportunistic chatter. Wouldnt hold my breath on that one leading anywere. As is, unfortunately, standard procedure when it comes to European initiatives on the international scene. Pick your subject.
* Position changes and new positions
- Deltahedged my long Gbp/Usd puts as spot crossed the strike.
- Bought lower delta Gbp/Usd puts.
- Bought Usd/Zar spot
- Bought Usd/Pln spot
- Sold Gbp/Nok spot
- Bought Nok/Sek spot
- Bought SKF ETF
As usual, good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
17 September 2009
The Irish bank bailout; getting rid of the Irish creditplug. Taxpayers buying bad assets at inflated prices. May the bubble not burst.
* Irish bank stocks are rallying this morning as Irish taxpayers buy their bad debts above market value. No wonder the stocks are rallying. Will Ireland become the first stagflation country? I believe so.
Well, that certainly flushed the Irish creditplug out of the monetary system. Back to happy days and lending again. The circulation of the monetary base is now likely to accelerate sharply from a frozen state. Irish inflation should increase on the back of it with growth sorely lagging behind. This could become the first stagflation experiment. Tensions to rise within the Eurozone as other countries are tempted to follow suit. Path of least resistance, a path frought with dangers.
The bubble is still getting pumped up. Lets just hope is doesnt burst.
As usual, good luck,
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
Well, that certainly flushed the Irish creditplug out of the monetary system. Back to happy days and lending again. The circulation of the monetary base is now likely to accelerate sharply from a frozen state. Irish inflation should increase on the back of it with growth sorely lagging behind. This could become the first stagflation experiment. Tensions to rise within the Eurozone as other countries are tempted to follow suit. Path of least resistance, a path frought with dangers.
The bubble is still getting pumped up. Lets just hope is doesnt burst.
As usual, good luck,
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
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