Dear Investors,
Triggered a few short dated trades this morning:
- Bought EURUSD @ 1.3840 and
- Bought S&P mini June @ 930.00 -
It is Monday and market does not like Monday's as the news flow is rich and big..... the "Plunge team" will be in later do not worry at all:...Obama is there to safe us all with his "smooth talking " which mostly reminds me of Sade' early hits ;-)
http://www.last.fm/music/Sade/Greatest+HitsThe FED meeting this week is kind of interesting as market it trying to focus on how Bernanke will talk down those long-term rates - not long ago ALL OF THE SUCCESS of Bernanke was based on his ability to maintain and keep 10 year rates low - now when the rates are trading close to 4 pc I guess the success is something else, little do I know....
Is it me or does the eternal talk of "
exit strategy" which dominates CNBC, Bloomberg and other media annoys you much as it does me?
Exit strategy from what?
The biggest manipulated "demand-pull" in history? Or the biggest "cheap talk" about improvements ever in history? Or the 50 ways to cone the investor and electorates?
You make your choise - the problem is that the "dumb" money - read: pensions funds, government agencies, SWF and the like are ALL desperately chasing the return of MSCI, their glory benchmark, which they will trail forever as the MAIN DRIVER right now is China, China and then some more China.
MSCI is simply constructed wrongly for this type of
Asia biased rallyThe new agenda, which I have written about a few times from the road in Asia is one of China trying to use this crisis to link other countries and currencies to their currency band - creating a "domestic Asian" market which they ultimately channel more and more of their excess saving towards securing excess growth relative to Europe and the US, but also use politically to call more shots - which is the bigger macro issue: Asia is on the road to establish a stronger, deserved role - one of the by product will be one major adjustment of MSCI weights which is so out of touch with the reality that it makes fund managers almost scream......
The Chinese seems to believe, not unlike Obama, that they alone can pull the world out of recession - maybe one day, when they get to understand the true meaning of Say's Law: Supply creates its own demand -- or in Wiki version:
http://en.wikipedia.org/wiki/Say%27s_law - they will understand the consumer of the US of A and Europe are toast and I mean toast.....
Did you notice how Russia almost single handedly today made sure the US Dollar saw some strength by virtue of Kudrin comments. It is a joke.....
http://www.bloomberg.com/apps/news?pid=20601085&sid=aEVT7Gx4jFpI - and hence my buying of EURUSD this pm....
I had lunch with my good friend Andreas Junge, who I rate for his expertise on freight - he says pretty much ALL of the improvement in freight presently comes from China and dominantly in Iron Ore and in the lines supplying China, whereas many other lines are running with excess capacity ..... in other words: There is presently in freight, as in the financial markets ONE forceful demand factor and plenty of suppliers......
Bottom line - as little as I know, I still "hang with" the program of chance of 1050 only because Asia (China) is determined to give Obama a run for his money on being the most INTERVENTIONIST adminstrations around and unlike Obama, the "rulers" of Asia actually got some money to burn!!!! Hence my conservative expectations of a "good summer" only to be substituted for nasty, nasty Q3 and Q4, but as always I will keep my "postive" attitude in tact.
Strategy:
All markets: Day trade the range - using the most general concept of mean reversion - without drift.
FX: Like weak US Dollar despite Russia saving them today.... Obama is playing with matches and as the old nanny rule goes: Playing with fire makes you pants wet.....
Like SGD and JPY longs.... and own them both....
FI: 60 pc chance of FED hiking? Are you kidding me? FED will ANYTHING to take yield of 10 year notes down - I'm soon buyer of 10y on mean-reversion...
Major buyer of Euro-dollar December.....
Commodities:
Like gold here
@ 930.00
Will short Crude soon..
Love grains
Stocks:
Long S&P
- with no firm believe but accept the randomness
Safe trading,
Steen Jakobsen
