There is no atheist in a fox hole - Weekly Investment Meeting

We had our weekly investment meeting and to say the least there is a matter of different opinions. In the blue corner we got the resident equity bull Mr. Lars Thørs, who sees no evil, hear no evil(but highly profitable) -and in the red corner we got yours sincerely who is on the verge of committing public Harakiri in frustration over how much B.S there is flying around on a daily basis.....


The gist of the conversation goes as follow:


There are really three if not four different scenarios for balance of 2009 and 2010:








Note: The X-axis is time, and Y- the return(yield)....


(Click on diagrams to enlarge)



Note: The different scenario's with impact on macro and asset allocation.
(Click on diagrams to enlarge)


In our opinion there will be a movement from presently: Sweet-spot through Double-dip into Crisis 2.0 over the next 6-9 month, but we could be wrong a below we have assigned our consensus vs. the market in terms of odds.

Note: Limus Capital view relative to consensus


The conclusion on the outlook is: It's either going to work or not, we do not see how a V-shaped recovery can be established - but oddly enough here we are at odds with some of the major players in the macro world, who all seems to think the bubble in US Treasury is the biggest, but while we agree on the overvaluation we feel that if we move out of the Sweet-spot then it will be due to increased concern about rising yields on Treasuries - in other words - a starting crisis of confidence.


This scenario is based on several key points:


Maturity of both banks and government debt has shortened considerably making the next 24 month the biggest issuance period in monetary history


There are simply not enough demand to take the supply in our opinion, which in turn will force the rates higher. The US Government has shortened the average maturity from 70 month in 2000 to less than 50 month early this year (http://tinyurl.com/ydbnnqj) - this happens as the public debt reaches 8.000.000.000.000 USD (8 trillion US Dollars), but more importantly almost 50% of that debt expires in the next year! 


This should on its own create some concern, but at the same time the banking system has done exactly the same exercise according to Moody's report out this week: http://tinyurl.com/yhf2nm4


The average maturities of new debt issuance by Moody's rated-banks around the world fell from 7,2 years to 4,7 years over the last five years! This constitutes the shortest average maturity in history. Practically it means the banks will face maturing debt of 10.000.000.000.000 (10 trillion US dollars) between now and 2015 - or 7.000.000.000.000 between now and 2012.


Let us not kid ourselves, there is always some debt maturing - T-bill normally constitutes 30-35% of funding, but the point being that even the slightest crack in confidence could have a snowball effect on confidence and catapult  rates higher, as the shortened maturity increases the demand for higher yield and in a world of falling disposable income (due to higher unemployment) - the private sector savings will be in great demand across all assets not just funding the mighty US of A.


More stimulus & how Obama could be forced for more to 'print money again despite a political lack of will to do so


The recent talk of town among Obama's clones is to not only keep up the spending but even to increase it as he did too little to start with! Lately former Labour Secretary Robert Reich and Paul Krugman have called for such measures. The philosophy was reflected in my 'analysis' on earlier blog this week.


From Monday morning quarterbacking, Nov. 9, 2009: Geithner said it best this weekend: "If we put the brakes on too quickly, we will weaken the economy and the financial system, unemployment will rise, more businesses will fail, budget deficits will rise, and the ultimate cost of the crisis will be greater," he told reporters in Scotland. "It is too early to start to lean against recovery."

Ok, let me get this straight: So if we continue spending tax payers money then: we will have smaller deficit, lower unemployment, less business failures, and smaller ultimate bill for resurrecting the world? If that does happen I will be playing for Denmark upfront in the next World Cup in soccer in South Africa next year (despite my 45 yrs and less than fit fitness level)


My friend Daniel Arbess, who runs the Xerion Hedge Fund inside Perella, Weinberg Partners had some excellent point on how US and Europe is mired in deflationary forces for two out of three macro themes working presently:

• Consumer deleveraging. Rising unemployment ==> Deflation
• Improving earnings via cost reductions and cheaper finished product imports from China ==> Deflation
• Zero rate policy drives investors to speculative investments ==> Inflationary....

Dan has several others good observations among them that such a "global imbalance" is continuing leading to some sort of confrontation.


But all of the above really talks about is a double-dip, the fact that post the biggest stimulus in world history, the result was not even back to trend growth, and in 2010 without more stimulus then Crisis 2.0 will come back to haunt.


In order to make this more operational this our expected returns in the different scenarios:



Click to enlarge

It is worth noting that the key in Crisis 2.0 is the LACK OF POSITIVE RETURN from government bonds - this is the main driver of the worst to come scenario.


In normal markets long Government bonds would perform in times of crisis, in this one we have -3,9% expected return and the only positive being a much smaller volatility relative to Sweet-spot.


The way we use this is not as a way to make money, but these three basic possible scenario's are the ones we need to navigate. (The above is very much work in progress)


Right now we are in the sweet-spot for better or worse, and the expected return on this is close to 16%! 


Something which will please the market, but we(Limus) have a much smaller 1 in 4 odds vs. 2 in 5 odds among the consensus investors for this - again we stand almost alone with our projections, but as Groucho Marx said in wire to his club wanting him as a member : "PLEASE ACCEPT MY RESIGNATION. I DON'T WANT TO BELONG TO ANY CLUB THAT WILL ACCEPT PEOPLE LIKE ME AS A MEMBER"


Investment outlook conclusion:


There is nothing on the horizon indicating the see-no-evil-hear-no-evil lose monetary policy will end - on contraire - the central banks, the pundits, the politicians all firmly believe spending more money will create smaller deficits, higher long term growth, in this environment keeping to your Beta exposure is the only option. Our Beta model is very simple and can be executed through ETF's:




Strategy:


We continue to hold a negative outlook on the market in Limus Capital Partners, but our outside partners are either neutral or major bullish on the market. 


The correct allocation presently is to benchmark everything (the exercise of Beta-chasing) - in our case: Beta model long plus some down-side protection through our Alpha plays (which is the ones we describe mostly here on the blog)


The charts and most of the work done for this presentation was courtesy of my partner Mr. Jesper Christiansen.


Safe trading,


Steen

S&P should be at 750-00! What is it doing here?

Dear Investors,

Sometimes you read something which makes you think again - my friend Yoshi often does this to me, so I have asked Yoshi for permission to print this e-mail he sent me today. Yoshi is an independent trader in Singapore and one of the true warriors of trading. Enjoy - Steen -

===========================================================

Dear friends,

We have now arrived at S&P 950 and my model is flashing its short-term upside risk to 1050 while the current fair value is at $43 x 15-17 (S&P at 750). Well, that's what my head says, but my heart is saying the Japanese style long-term decline will eventually lead S&P to $35 operating ESP at 15x multiple assuming the positive correlation between Obama's approval rating and S&P. So forget about any quick killings in the mkt!

The Bilderberg Group, the plunge protection team, the Japanese PKO and the European something, validity of their existence is irrelevant. In the new world of Tarp, the Fed and the rape of tax payers, I have no problem believing anything. But, even putting these old bones together still would not make a big enough dinosaurs to make troubles for the emotionally sane equity and USD bears.

So I came across a FT article by Sundeep Tucker: (http://www.ft.com/cms/s/0/a7d56c18-5505-11de-b5d4-00144feabdc0.html)

Summary of the article: Early last year CIC picked two or three fund management groups for each of six investment mandates with an aggregate sum of $12bn. CIC has also earmarked a further $30bn of its liquid assets for global portfolio managers over the next 6 to 12 months. CIC and SAFE will hand additional monies to hedge funds and private equity firms, neither of whom typically need to declare the source of their financing. The collapse of the Chinalco/Rio deal will spark soul searching in Beijing. The irony is that it will hasten China’s push to hand bucket loads of money to foreign fund managers.

Well, CIC & SAFE/$2 trillion China plus the old bones may be enough to bully the mkt in the equity, govies, commodities and FX mkts to adjust their reserve portfolio without affecting the USD peg. Greenspan had kept quiet about China's UST purchase with his "Conundrum" bluff. The UST kept going up regardless of the Fed fund rate for sometime.
Now, are we seeing a Chinese Texas hedge after they got burned in their 2007-2008 equity debut? I am guessing their average S&P break-even is around 1100-1200. Considering their concerns over the UST, high priority on energy & commodities security and their determination to keep the peg, their indirect equity investments could make sense if they get their hedge ratios vs. UST right. They could well have decided to readjust their reserve portfolio when S&P happened to be around 650.

S&P M09 emini is now at 928 as I write my letter, but I just think the next bear mkt to the initial target of S&P 750 (and ultimately to 350-450) will be a long process with a few more false rallies.

Remember the African proverb? "When a man threatens you when you are asleep, stay asleep. But when a women curses you, stay awake." So then, what should we be looking out for to time for the next sustainable reversal in S&P and UST? It will be tax and rate hikes as we saw PM Hashimoto's 98 consumption tax increase and Hayami's 2000 premature ending of ZIRP had killed off the feeble recovery and all came to its head during the Japanese banking crisis.

Before the real black swan (geopolitical risk) will finally have landed upon us, I see tax and rate hikes as the precursors however improbable they may seem right now. Once Geithner, Summers and Bernanke fall from their grace, the political repercussion will dictate the fiscal and monetary policies and I sure will feel sorry for Volcker to take over the Fed to tarnish his good reputation by having to raise the Fed fund rate.

Well, with these current long term macro views of mine, I will get some sleep so I can make it to the Asian open this morning to trade short term in the mess of futures roll overs.

Yoshi

Market is long: Hope, hope and hope....the cynic Friday comment

No one seems to care for 50 bln. $ fraud scandale, no one seems to notice Obama is knee-deep involved in Chicago and that ALL PRESS, ALL WEEKEND will be on him trying to explain away how apperently the 2nd most important man in the US.. the Chief of Staff got involved in Chicago... dodgy politics....

Washington wud not be able to sell a cold Coke in Sahara, but pretends things are good

Jamie Dimon, CEO JP Morgan pretty much tell the world Q4 is TOAST - and that they have serious issue with earnings and potentially capital... but still...market is long hope, hope and hope...

I bid you all a lovely week-end...and will not remind you that 2008 was the year of financial industry insolvency, it seems more and more 2009 will be the year of Consumer/Private insolvency, something much worse at its entails people losing their job.. as Reagan said: A recession is when your neightbour loses his job, a depression is when you lose your job... I am afraid...Depression is now the name of game - the key catalyst being EVERYONE on CNBC USA tells me its impossible.. making it a 99% certainty.........

Strategy

Long 90% cash/fixed income - took profit on short cash S&P-500, took profit in the massive move in EURUSD.......took profit in Gold.....still MEGA long puts in STOXX50..... took profit in S&P500 put options (exp next Friday- decay starting to hurt).....and in our Allocation model we are:

All codes are Saxo system codes and number of shares/index based on 1mio EUR.....:

Short 12% S&P-500 (SP500.I) --- 145
Short 3% Stoxx50(Stoxx50e.I) --- 13
Short 3% Nikkei (NI225.I) --- 444
Long 3.5% Ultrashort MSCI Emerging market(EEV:arcx) --- 516
Long 5.0% Short DJ AIG Commodity Index(SALL:xlon) --- 520
Long 35% IShares 10-20 Y Treasury Bonds (TLH:acrx) --- 3838
Long 35% 7-10 Y Eur bons (IBCL:xlon) --- 2229

Safe trading,

Steen

A little learning is a dangerous thing but a lot of ignorance is just as bad.

A little learning is a dangerous thing but a lot of ignorance is just as bad.
Bob Edwards

I have decided to explain the crisis and why the plan is useless once and for all to myself - it is really an economy of scale issue as it is the question I get the most (Yes, I know you are wondering why people even bother to ask me anything being an European Elitist Arrogant High-horse something as a "friendly anonymous visitor to my site called me!)....these days....but let me try:

The background is this:

Imagine you have a bank - for arguments sake let us call it : Banque Paulson & Bernanke - their corporate motto's is: "We create moral hazards better than anyone else -faster".....

This bank BP&P got an asset side which really mimics a traditonal portfolio:

A little stock, a little government bonds(10%), a little (sorry a lot) of mortgages(30%), a little lending(40%), a little Real Estate(20%) and other on-and-off balancesheet vehicles...

- It is - obviously- all funded day by day in the money market.

The portfolio is leveraged 10 times - which happens to be the average leverage in commercial banks.

Now - the market (portfolio) is down 15% - meaning you are insolvent by 50% -- i.e 10 x 15% = 150% minus your capital = -50% - but your "bank" --- allows you to keep the portfolio because tomorrow they "hope" the market will be better.....(The Church going traders I call them..)

Then one day the Congress and its two parties called We-got-zero-clue and We-got-even-less-clue gets call from The White House - some geezer who doesn't know what an CDO is shouts: "Fire, Fire - pants on fire ......." Please send in the Mortgage Firebrigade..... fast!

Congress goes into panic and decides they will buy ALL MORTGAGES and ALL MORTGAGE INSTITUTIONS in the country.

Fine.....but hang on... lets go through this...

If the GOVERNMENT buys only the mortgage loss from my portfolio what happens next?

Well if we deal a market-prices the mortgage portfolio is off my book @ 20 cents in the dollar... so my cash goes up but the loss remains in place plus taking 30% of loss off still leaves me short a few bucks...but even if they bail-out out without loss' on my mortgages I am still short: (100 USD - 30% in mortgages equals 30 USD x 10 leverage = 300 USD x 15% loss = equals 45 USD loss....so I am getting 45 USD back - but I am down 50 USD net - leaving me 5 US dollars short (Yes, this is constructed portfolio but.. point is still the same....)

- and IF... the others parts of the portfolio continues to fall --- BP&B is still even more insolvent.

Why?

Because you are NOT dealing with the real issues:

1. Funding is done day by day - with massive mismatch in time - Bad business model is environment of scarce credit creation.
2. Leverage - in a perfect storm EVERYTHING becomes correlated. .meaning falling...
3. Mortgages - there are 4.5 mio. unsold homes, so whether government or private sector owns them does not matter - its all math.....
4. Solvency - portfolio of BP&B still insolvent - why should anyone deal with them?
5. Transperency - how do I know BP&B is honest?

The right solution would be to let everyone go bankrupt - but if you want to spend the tax payers money the government needs to think like a Private Equity Fund - buy on the bid, restructure balance sheet,give new management upside in equity, sack the old management, and buy equity upside leverage.

There was God forbid an excellent Swedish model for this before - Imagine that recommending anything Swedish is a first for me......but DO realise this is PURE SOCIALDEMOCRATIC policy and hence I can not support it, but it did work before....

So......if the deal adresss real issues it will work, but I doubt BP&B will survive longer than a few quarters more, and neither should they....

Strategy:

Calling it a strategy is an insult to the word itself, but.....

85% cash
Long USD vs EUR as we broke uptrend since 2000 - meaning lower EURUSD
Small short T-bonds
Small long upside stocks...

Nice week-end

Steen Jakobsen

Reality is close by....

This very simple fund manager have noticed one major change in the last 48 hours which I will call significant: More and more people have started, finally, to realise this is serious crisis - probably the worst crisis in my years in the market. That's a positive, because if we engage on the issue instead of disengaging there is fair chance REALITY will kick in.

I personally think we are 1-7 days away from getting change to marked-to-market practise - It does not make a lot of sense, even on a good day, to take somethingwhich is not priced relative to its intrinsic value. Take a house - even if a mortgage trades @ 20 cents in the US dollar, you would expect the house to trade 40-60% of price in sale?

The biggest joke is Morgan Stanley recent reporting - they made pretty much all their money from having issued debt - as this debt goes down they book the profit - they issue @100 - market is now 80- hence 20% profit - but the only problems being .. to take this profit.. you need to go bankrupt! Welcome to the world of finance.

This fund manager have reduced his EXTREMELY negative portfolio to 10% of Friday's position. There could be bounce or not - there could be more Socialist ideas like banning ALL short-selling etc - (for the record if anyone thinks banning short-selling helps the market - they need to get their school money back!).....

I am now 85% cash - and awaiting Monday --- still small long upside EURUSD, small downside in S&P - (deep-in-the-money Puts)...... rest I leave for the market to figure out.

I have become "crisis fatique" - and if even my local business newspaper have realised something is rotten in the state of Denmark - I will step aside......

This does not mean I have become positive- it merely indicates that too many indicators are at 10 standard deviations -reflecting lack of transparency even for veteran trader like myself.

Stay safe.

Steen

when in doubt......go on holiday?

My colleague David Karsbøl have developped a model based on the supposed short-term model of The US Treasury mentioned in Paul O'Neills book, where he states based on only weekly data alone The Treasury's growth model exceeded Wall Streets economist forecast accuracy (Mind you that's an easy goal to set yourself!), but the point being this:

David models continues its free fall indicating we are now moving into solid negative growth and consumer demand.

The later is best seen through the spectrum of credit cards - The US consumer has always been willing to flaunt the plastic even when they have negative equity, but in the land of designer credit cards things are turning to the worse:

Moody's Investor service reports that the charge off rate, which measures defaults as percentage of loans outstanding - rose 6.05% in in March, from 4.64% a year earlier.

The charge off rate peaked above 7% in the 1991 and 2001 recession.

The underlying trend indication is for worst to come as:

1. The repayment amount are decreasing. The US consumer is simply paying less into the bills, obviously indicating either consumption preference or lack of hard dollars...

2. The amount of people skipping 3rd and 4th payment also on the rise.....again not exactly the best sign..

The thing to understand, and this is important.... The financial "melt-down" in banking has been avoided (for now) by Bernanke and his Merry Men's circling of the wagons, but the next phase is one of considerable weakning global demand, the tail risk being we will revert back into credit crisis, as personable income collapse, margin erodes, corporate defaults starts to rise, and banks continues to hoard capital.

Trichet, a man who at long last is gaining some respect from me, hit it spot on yesterday: "The worst could be to come, and an ongoing, very significant market correction is in process"...

My respect for Trichet is rising(note: rising - not gained!) as maintaining unchanged ECB rates does the job for now - it gives him some credibility vis-a-vis inflation, and he realise, correctly, cutting rates not doing anything to real economy as the banks are in trouble.

He also, between the lines with his insight into the European banking system, indicates the European banks needs to earn up to the credit issue and the incoming freight train called potential stagflation.

The European banks are heavily subsidised through the liquidity provision in place, with Spanish banks issuing mortgage backed paper at 101 with ECB and seeing the actual price in the market trading @ 90 bid at best - talk about indirect support.

In terms of the temperature of the market, the bullish consensus hitting new highs, and CNBC commentators, their guests, can not stop talking the market higher - I have been neutral but I am slightly concerned about the market from here;

1405-10 in the S&P was supposed to get us flying, now in the 4th week we trade 1395-1435 and

VIX volatility is coming off - we are due for volatility spike and a range break-out.

I feel downside is the more likely as Q1 earnings was massive disappoint overall.

Stripped for oil companies, the 441 companies who reported so far saw profit tank 30.2% this quarter and 26% in the last.

Energy companies now make up 50% of all profit in the S&P!

Not exactly reason for joy - the fact is the market became oversold in January and March, and now its overbought, the next bigger directional play will be based on how the real economy tracks from here - my take as described above being a path of grinding slower growth, something a very smart friend of mine calls: growth recession indicating negative quarter by quarter growth but probably not outright recession numbers.

It should also be noted Q1 from growth perspective saw one-off factors which will be hard to copy in Q2 - Germany and Europe saw unusually high investments rates- probably covering the fact that most European companies faced bottle-necks in production, input materials and labor.

While in the US the massive inventory build was hardly a choice situation for US companies...but as always I am merely putting odds on this not making predictions.

Strategy

Moving away from Beta long, to net short exposure on market as of today; short banks-, big europeans industrials, and net indices - all on valuation and lack of technical upside break.

Still like credit overall in high grade names.....

EMG- extremely overpriced - looking to sell.......

FX - still firmly believing in new cyclical final low for US dollar- pricing in 100 bps hikes in the US a joke right in front of prolonged slow-down..........Long CAD, AUD, EUR vs. US dollar.

FI - mean reversion play long Bunds @ 113.38 ish... mainly options...

Commodities- stopped in agri- and still long long-term puts in crude....but looking for normalisation of commotidies to gradually reflect growth slow-down.

Best of luck,

Steen

We seriously need a crisis now!

Back - still slightly jet-lagged but I got so much on my mind, and I will try to distil it as best possible:

1. Unemployment is rising and fast

2. US consumers has been max'ed out
3. Asia dream is over for this time....high inflation and negative real rates killing world saving reservoir.
4. US Dollar is on the brink of real crisis
5. 95% of all managers do not understand the risk involved here. A system without a healthy working interbank market is no market.

I know, I know, most people see me as this total pessimistic guy on the economy - and the world, and to some extent that has been right since last spring where I started rambling about the incoming risk of slow down, crisis, and how private equity was dead.

I am not praising myself here, I for one, admits to not having ANY predictive powers, but at all times I do try to put odds on upcoming market moves.

Where in the past being too pessimistic has been wrong 99% of the time, I now think we have seen true paradigm shift, where being too optimistic will reward no one.

Why?Think about it for two minutes:

In a "normal" business cycle the rich nations will invest in the poor in order to get excess return on their capital. The flow will go from rich to poor nations.

Now? We have the "poor" nations, i.e EMG countries pouring money into the US at returns which is sub-par.

This will not work I am sorry. Capital should go where the marginal return is positive and rising not the opposite!

The fact is 10% of the world, I.e, the US, uses 80% of the world savings!In fact the whole recycling story is tied up on two things:

1. Strategic Deals. Energy deals for Middle East and for Asia import of cheap labour
2. Political agendas where Asia got the US "by its balls" by owning trillions of IOU notes.

Nowhere! Nowhere is allocation of capital based on best return profile!!!!!!!!

If you had the choice in investing a sum of money where would you invest?

1. Europe - poor demographics, with tail wind maximum growth of 2.5%....
2. US - poor demographics, saving deficit, real rates of minus 200 bps and weakening US dollar policy, maximum growth of 3.5/4.0%
3. Asia - excellent demographics, high saving rates, EXTREME need for infrastructure investments, minimum growth rates of 4.0/5.0% ?

I think it is very simple, and most intelligent investors seems to agree as the P/E for EMG for a while exceeded the P/E for G-15!

My point here is..... as the viscous cycle continues to compound the more the REAL RATES of growth, inflation , employment, currency rates gets out of whack with fundamentals.

Take Asia - now they got no monetary policy options (its own by Bernanke through the US dollar peg), high inflation (most above 5%) and negative real rates.

The biggest savers in the world is losing money saving !

Short-term that's not an issue, but when the net wealth decreases so does the incentive lend the money overseas.

The US consuming 80% of world savings offers you: more negative real rates than at home PLUS a guarantee for loss of currency value - is that a proposition you will take? No!

The result if this continues is one of stronger and stronger Asian currencies, with consumption falling as REAL WEALTH decreases and consumption comes down.

The saving grace being the STATE CAPITALISM in Asia which will keep pumping money into infrastructures making sure it crowds out private capital.

So this process which has been going on for way too long due to incompetent central bankers like Greenspan and Bernanke is reaching cross road where the worlds needs to face two major ghost:

Inflation and recession.

For balance to be established several things needs to happen:

1. The confidence in the US dollar needs to be restored preferably by increased saving rates and yields and a firm commitment to improve and maintain US competitiveness. This will work as confidence in the US will lower long-term yields, reduce inflation expectations and make investors commit to the "cheap" US dollar by allocating capital into the US.

2 Money needs to flow to highest marginal utility, which means where investment returns are highest. This means re-establishing the banking system to be able create CREDIT which in turn will be used for investments. The world is full of money, but there is ZERO credit. The market needs to flush out bad investment so the sounds investment can attract the proper rate....

3. The central banker should step away from speaking, engaging in the market place, and let market forces play it role. They should monitor inflation and commit to reduce inflation expectations to long-term averages.

Long time ago in the 1980s when I went to University I learned in Polical Science that the economies that survives long-term are the ones with the least amount of public engagement.

The US being the prime example, the very set-up of the US constitution making sure that Congresss and the President can't agree on anything meaning everything is left for the micro level of the economy to work things out. This worked so well during the Clinton years, which was ALL talk and no action (which reminds me of a lot of people I have met both internally and externally recently :-))

The bottom line here:

Never in my long life as a trader has perception and reality been further apart.

No one seems to understand that a capitalistic system with the above rules and no working banking system is the biggest systemic risk ever, and the policy response is one of more STATE CAPITALISME than before.

It is beginning to look a lot like the 1970s:

Big government, central ignoring inflation risk and rising energy and commodity prices.

This time we have a helicopter pilot who thinks its right to collect rent on Federal money - where is Volker when we need him ?

Finally, here is link to lengthy interview I did yesterday on the markets if you are not already bored - the link to the interview is on the right hand side.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aUn1XoFl9aB4&refer=home

We had excellent March - took profit - restarting engines now...

FX: Long MXN vs USD, long EURUSD from today.... (@ 1.5545 and @ 1.5665), short EURNOK @ 8.0170

FI: Long 122 US T-bonds calls

COM: Long AUG puts.. Long DBA

Looking to built negative Asian growth portfolio....more on strategy tomorrow.


Med Venlig Hilsen Yours Sincerely Steen Jakobsen, Chief Investment Officer, Saxo Fund Management Saxo Bank A/S -London
40 Bank Street, 26th Floor Canary WharfLondon E14 5DA
Phone: +44 (0)207 151 2010 Fax: +44 (0)207 151 2001
Please visit our website at: http://www.saxobank.com


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