Remember when the USD was gasping for its last breath? Remember when Russia decided to diversify its foreign cash holdings along with China and bought up more euros? Remember . .
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Over the past two years I've brought up 1987 periodically as just a mere possibility that has to be factored. I don't want to think back to those days of currency wars, political grandstanding, and crazy volatility, but alas, every time I try to clear my mind . . .
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It is Thanksgiving, so for most Americans an opportunity to spend time with family, go crazy, and use the excuse to purchase some frivolous electronics at half of what our neighbors paid last month - a truly feel-good holiday.
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I assume Berlusconi is having some sleeping problems this week as his government falls; his only consolation is that prognosticators who predicted Italian bond yields would fall when he's gone have turned out to be completely mistaken. The problem with Italy isn't Berlusconi . . . it's Italy.
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We started off the week with a big, low volume squeeze - but that's not news anymore. The intraday moves and even the successive day swings have been violent and the numbers being reported by different mutual funds and hedge funds attest to the difficulty of consistent returns in such tumult.
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As the euro continues to disappoint the market, or just live up to my negative expectations, European equities are following the erratic behavior, and for good reason.
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For a brief moment, the markets believed. For a brief moment, the Greek problem was solved. But then reality set it. Greece’s fiscal austerity and monetary headache is going nowhere and German’s are getting fed up with supporting their neighbors.
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G3 Currencies
I’ll say it: G3 currencies are not making sense. Forget about irrational, or momentum, or fundamental, or whatever. There appears to be almost no underlying logic in some of the recent moves exhibited by the major currencies.
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...or yen and euro. Long time readers know that I have maintained short exposure to both the yen and euro starting in November of 2009 - pretty long by currency traders perspective.
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I don't want to write about gold and silver, but I just can't help myself. Gold is at all-time highs and silver is at all-time ex-Hunt brothers highs.
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And right now, there's one asset that looks pretty ugly...
What if I told you there was an asset that was sitting at 52-week lows. It has some negative fundamentals, and a few relative positives, but no foreseeable absolute positives.
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Tags: China, currency trading, energy, Euro, Middle East, oil, USD, Yuan
Commodities/Futures, Currency, Politics | | 
March 4, 2011 12:58 pm | 
Comments (0)
Here's an idea: the real trigger for the correction won't be the Middle East. As Libya, Bahrain, and maybe soon Saudi Arabia take center stage, pundits and analysts the world over are focused on oil, commodities, inflation, and Wisconsin unions. But the Middle East wasn't the marginal buyer.
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