95012That tie is pretty well known; it just depends upon the degree of hot money available from Japan. China floats it is ccy (which will allow JPY to strengthen), or Japan raises rates, or any number of similar factors, that upward trend will just go poof...Originally Posted by ;
95012China probably won't float it is currency for a long time-and even though Japan ever gets to .75, that won't stop the carry trade anyway.
Besides, the Dems are jumping on this float item for a campaign issue. It is nonsense. Global inflation would go thru the roof if that occurred.
And when you are of the China is taking our tasks theory-point me towards the amounts that state jobs have decreased since China got to the international economy.
95012Well, here you need to look at individual carrys. The SP/Dow could become desired ifthe CDO issue surfaces - and given that a sizable amount are held as cash reserves for businesses not normally involved in trading, it may do so. The WSJ recently had an article on Smucker's (for example) which was becoming hurt by having placed a substantial part of their operating float to CDO's; just how widespread the problem is really unknown. The ECB is pouring liquidity to the market to hide the problem, when will that come home to roost (and show up in Eur/Jpy); meanwhile housing in Britain is on the ropes. . .Like Lt. Hearn at Mailer's The Naked the Dead I am not in the company of calling history, I just think these are possible problems anyone looking to benefit from the carry trade should bear in mind.
As for China, what's going to happen if the USD drops another 20 or 30 percent against oil? China buys a lot, and needs lots of other commodity imports. They can manage the USD's fall - and in reality it helps with their markets in Europe Japan, but who knows how long the annoyance of import inflation will be offset by exports? Bloombergs brought up an interesting point re USD interest rates fueling the Shanghai mkt long will China allow this to continue via the dirty float? I don't understand. A couple of years ago China went from a peg into a dirty float - and while it was expected, it was still a surprise to the markets...
I'd anticipate US protectionism to continue to heat up within the election period - not because the practice is wrong or right, but because people always prefer to lay the blame for their troubles on others, and effective politicians from definition are proficient at exploiting human weakness. Smoot-Hartley was helpful in turning what should happen to be a recession into a worldwide depression 70 years ago; I do not think politicians have learned much in the intervening years.
FWIWI do not think China is'taking' anything; but I do think the US is throwing a lot, with its own addiction to debt and extra consumerism. Maybe people must ask themselves why US private debt keeps growing, why many individuals must hold a number of jobs, and so many households can no longer afford to have one parent remaining at home, anytime they think the jobs numbers indie a healthy economy. Additionally, it is useful to check at exactly which sectors are providing the job development - currently food providers, health care, and local gov'ts. I don't think that's especially healthy...
95012You've got some very good ideas there-and there is nothing more that I would love to view then a good discussion regarding those issues. So far as the CDO issue affecting equity markets at the future-let's take a look at what happened. Citibank took write-downs because of this issue and also what happened-the stock actually climbed. The main reason is twofold:
1. The market was hoping to observe that the write-downs and is joyful that the banks are receiving this out of the way now
2. Citi indied the worst of the situation was supporting them
What that means, if history repeats itself, is that the market expects to see further losses associated with those problems and doesn't figure to have a big hit from information similar to this. They could rise. Sub prime declines are old news and the entire world isn't finishing from the prime issues.
I don't see that the ECB is trying to hide anything-the problems are well known. What's intriguing is that banks are borrowing Euro's here and these loans can be concealed. That is why no British banks-except for Northern Rock-has made for the BoE. What's also fascinating is that EUR/GPY fel. No big surprise there as Euro depreciation vs Sterling makes these loans less costly.
Oil gets more expensive as the dollar depreciates because oil sales are all denominated in dollars. Oil makes cheaper if your currency is appreciating vs the Dollar.
And the main reason why the Shang Hai (and other EM's) are having a quick appreciation is because for the many part-their currencies are pegged to the dollar. Hence, the fed's rate reduction is a reduction for all these overheated markets. That could get dangerous for them later on because inflation is very likely to be stoked.
However, I would imagine that estimating exactly what degree of growth in China is very likely to inflate an unsustainable bubble would be rather difficult to model. For example, it's been estimated that China should create about 20 million jobs.
While I am not a major fan of the current crop of US politicians-it's well recognized that free trade has been a massive boon. I tend to doubt that anything will change if Reblican or a Democrat becomes President.
95012
Reading all this reminds me of fooled by randomness, curve fitting backtests and the previous bit smells to be of death, peril and burnt flesh. Or accounts. Either works.
It reads a little akin to saying I understand the future, if you desired to be mean(simply because there's been a pattern x previously does not imply it has infinite continuation into the future, this comprises the sunrise pp. See also the concept of necessary connection at Hume and similiar/related;p).
Additionally:
If poster hadn't said NewstraderFX I could have sworn that this was directly from a 5 post, recently began holy grail Foreign Exchange trading discussion thread.
No offense. Butreally.
95012Not something I would personally put cash on. The timetable/size for it is too big. This is. Not my timeframe whatsoever (=gt; contingency).
Interesting Ideas and musings, nonetheless.
95012Lol-down thru history have had their ideas met with resistance.
Obviously, there's no way to repay this now 1 way or the other so we will only need to wait a couple of decades.
But since you've taken a few quotes-i'll change them-
Every economic recession was a buying oppurtunity.
Recessions have gotten less frequent and therefore are shorter lived.
When the DOW and SP go up-the JPY crosses go up.
You're making one simple bet here-you're gambling that the world isn't going into a very protracted depression. Unless that happens-you can not lose.
95012Where have I seen this
Yen Falls as Gains in Stocks Launched Confidence in Carry Trades
By Ron Harui and David McIntyre
http://bloomberg.com/apps/data?pid=a...d=ih0RnpvYAwgY
http://bloomberg.com/apps/news?pid=p...d=aCOypc8g_r6A
Oct. 8 (Bloomberg) -- The yen dropped to the lowest in two months from the euro as profits in global stocks gave traders assurance to increase holdings of higher-yielding assets funded with money lent in Japan.
The yen slid versus 15 of those 17 most-active currencies as investors raised so-called carry trades on stakes Asian equities will accompany U.S. stocks higher. It dropped most against the New Zealand and Australian dollars after the Standard Poor's 500 Index rose to a record last week as U.S. employment growth eased concern the world's biggest economy will slide into recession.
SYDNEY (Thomson Financial) - The US dollar was trading higher against the yen but weaker against the euro in midmorning trade Monday as investors' risk appetite increased in response to positive economic statistics released in the US on Friday.
US non-farm payrolls for September rose 110,000 and the unemployment rate increased 0.1 percentage point to 4.7 percent, both in line with market expectations, extinguishing fears the world's biggest economy was sliding into recession.
'The easing in US recession fears saw a large jump in our risk-appetite index which climbed to 75.8 percent from 70.7 percent. This encouraged currencies such as the dollar and weighed on the Japanese yen and Swiss franc,' National Australia Bank head of currency egy John Kyriakopoulos said.
Do you get the impliions of this? The dollar depreciates versus the high yielders and appreciates vs the Yen when equities are bought and vice versa. This means when equites move-you know currency price will alter.
I will wait for DAYS before the right info tells me equities will move. I NEVER trade on any indiors because they are all crap. If a technical indior was that worked EVERYONE would trade with this.
But I will tell you with complete certainty that a good move in equities will move currency price in particular directions. Can not fail-works every moment.
95012To commence a historical position, just start with a small winning one,
start keeping few winning position with positive stop loss, and ignore it. Keep doing it until one of them succesfully split a dip
actually it's fun to perform, makes my hand itch like crazy
95012We heard Merrill Lynch announced mortgage and credit woes will lead it to place a third-quarter reduction, as it takes about $ 5.5 billion in writedown in the aftermath of a credit crunch that paralyzed Wall Street that summer....Perhaps it isn't such a big thing?
Additionally, in Japan, today ruling party members also appear to intend to do away with preferential measures for taxation levies on capital gains(and stock dividend) through stock dealings and intend to boost tax regarding stocks from 10% to 20% as if they promote shifts from investments to savings . Currently, taxation on bank deposit interest is 20% (Forex profits are contained in progressive income taxation, top tax rate is 50 percent ). I'm worried that they give investors and rich persons a cold reception, the rich are quick at running away...
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