Tag Archives: carry trade
Equity Markets Continue to Bleed. Why? German Stupidity, Volcker Rule and the Carry Trade Unwind
As usual European news leads the way with a ridiculous ’shoot in the foot’ decision coming out of Germany… Merkel will announce, on Wednesday, a financial transactions tax, and a ban on naked short selling on 10 of the “most-important” financial institutions in Germany. Ban also applies to CDS and Euro govt bonds. Will remain in place for an indefinite period of […]
US$ Carry Trade Intensifies, Pound Sterling Advances on BoE Comments, Fed’s Yellen’s Comments Add to US$ Decline, Mortgage Apps.Decline
Just as I suspected!! Well, apparently my conclusions are sound. Today the U.S.$ price is down more than 3/4% making a new low and news out of the UK is leading the charge. The Pound Sterling has gained 5% this week alone vs. the U.S.$. Today’s comments out of the BoE speak directly to the points I highlighted yesterday…. […]
US$/S&P 500 Correlation, Dollar Cheaper to Borrow Than the Yen, AIG Momentum Discussed
As the graph above illustrates, a serious correlation between the US$ and the US equity markets has developed over the last 9+ years. This correlation is strong and for policy makers in Washington, rather disturbing. The relationship is as follows: If the US$ loses value the equity markets have rallied and if the US$ strengthens equity markets have sold off. […]
Investment Strategy, Equity Market Trouble, “Positive” GDP, Norway Increases Rates
Stock Market Investing: The equity averages are down another 2.5+% today capping off an awful week during which time the uptrends from March and the 50day moving averages have been violated. The price action should not come as a shock but instead as a reminder of the tightrope the Fed must walk in order to keep this economic house of […]