Tag Archives: carry trade

Japan Tragedy & Gulf of Mexico BP Spill Follow Similar News Cycle / Precious Metals Outlook

The Japanese tragedy continues to unfold and I, like the rest of you, watch on in horror. Meanwhile, the toxic sludge spewing from the traditional financial media outlets is at full throttle with spigots wide open.  Nothing like a good tragedy to create hysteria and boost ratings. I’d like to take it down a notch and offer a reality check: […]

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 […]

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 […]

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. […]