But all endings are also beginnings. We just don't know it at the time.

Dear Investors,

I do not want to make to much fuzz about it all, but it has now be announced where I will start March 1st, I am so sorry for the "secrecy" but due to stock market regulations it was needed (I was told).. but here we go: http://tinyurl.com/dfunyq

For the full press release go to: http://drop.io/j4kkrol# password: steen

This blog will recommence shortly - and I will continue to write this if for no one else then myself.....

It is strange to be off the market, not having my funds anymore, but being a trader I have some personal stakes in the market and right now true to form I am:

Short the EURUSD (from 1.2800 again)

Short EURJPY from around here...

Short S&P

Long Gold.

It is a pitty that while I am on garden leave finally Europe caves in and tanks.... -

Obama meanwhile is making mistake after mistake .... let me say again: Obama is all about hope, not substance...watching the Geithner "show" last week reminded me why I have a sincere and deep distrust in bureaucrats - they have never had a "REAL JOB", the have never lost money, and they all seem to cheat either on their wifes or on taxes..... Want me to name the "cheats" in International top jobs ?

No, it is time for Volcker to get into action if Obama needs saving - Geithner lost Fed support, East Europe and indirectly Scandinavian banks going into tail spin - It is winter Ladies and the few gents - in season and in the economic cycle... it is time to bring out the warm cloth and get ready for the Icewinter.

On that happy note - safe trading and be...careful out there..

Steen

Change in life....

Dear Investors, Readers, Friends and Blogers,

Sorry for this being a personal note, but I have today resigned from my job as Chief Investment Officer for Saxo Bank after almost nine amazing years with the organisation. It was time for me to move on and I will later share with you where I will move next.

Now it is time for say Thank You and Goodbye to my many colleagues and friends inside- and outside Saxo Bank. It has been an honor to serve with and for you all. We have been part of a fairytale taking Saxo from less than 50 people when I joined to where it is today.

Today as it was leaked I was leaving I received so many incredible nice and personal e-mails. Thank you for all of them, it has been an absolute pleasure to work with you all and I am touched that you all took time to express your feelings and views on me, our time together and the future. This but one of the many personal notes I received:

O Captain, my Captain!
our fearful trip is done,
The ship has weathered every rack
the prize we sought is won....

Thank you!

I leave Saxo Bank on excellent terms with the new management and the two owners Kim and Lars, and I wish Saxo Bank all the best in the future.

I will continue to write my blog, but you will hopefully allow me a couple of weeks for comtemplation before I return in full force March 1st.

The unemployment data today only shows how the market is firmly anchored in "hope & faith" as the bad number was being taken as guarantee for more fiscal stimulus.

In the UK meanwhile the FSA will not allow ANY short-sales - nice one England - congratulation you are now back to the 1970s with intervention, big government - I have neutralised short EURGBP as GBP will now go 1.000 vs the US Dollar if there is any justice in the world of trading.
It may be very opportune time for me to close the books and recharge - everything is now based on randomness not trading markets....

Best wishes to you all.

My personal e-mail: jakobsst@gmail.com

Safe trading and good luck to all of you,

Steen

The secret of politics? Make a good treaty with Russia.” Otto Von Bismack

Just back from minus 20 degrees celcius in Russia and an quick 24 hrs on the ground. There is no way 24 hrs can do any justice to such a large and complicated country, but I must say I was impressed by the investors and journalists I met on the ground, the bad news being I got strong feeling Russia is going to get a serious dose of almost hyper inflation through the weak Ruble, but the Russians are used to boom-and-bust cycles so do not count them out, so here Jim Roger and I will have to disagree http://tinyurl.com/cog8z6

It is clear, also in Russia, that defending the Ruble @ 41 in the basket vs EUR & USD is not going to be the end game, but one has to remember the devaluation in Russia is no bigger than what we have seen in the UK.

Don't count on me as your new Russia expert, but writing off whole nations in an environment which is hostile to one and everyone due to credit constraints and general downsizing is a mistake in my opinion. When we move into to the reflationary side of this business cycle (not likely before 2011-ish) countries like Russia, India, China will do well.

Back in the "land of hope" the freight rates has been rising and created a lot of noise about market having turned, growth is coming back... but I'm sorry to be carrier of bad news, but using Baltic exchanges as gauge/indicator is simply wrong.

1. You need to look at individual routes

2. The supply/demand function of the pricing is skewed in favor of demand, as it takes very small additional demand to move the markets. There is fixed supply (the amount of ships) where as demand is ORDER DRIVEN. Hence making long-term conclusions based on small "bleeps on the radar" is clearly a hazardous policy.. but as always be my guest to live dangerously.

Strategy wise some investment ideas starting to formualte themselves medium term:

EUR.GBP: SELLLLLLLLLLLLLLL

The GBP is now oversold and the EUR is the most overvalued currency around, Eastern Europe is slowly indicating more pain in Europe(due to the high investments by core European countries) than most people of willing to accept for now including it seems Mr. Trichet....

(Link: Fitch sees more E.Europe downgrades after Russia http://tinyurl.com/aswpot). John Hardy my expert chartist agrees .....be short w. stop above .9050 for now.

(click on chart for larger version)



On the stock market we have been caught in 800-850 range for quite some time - for now there is hope of break to upside despite the continued erosion of capital in the banking sector across the world, but.. I will leave it to the market going into the Non-farm tomorrow, but will maintain the overall target of 600-690 for the S&P...

Still keeping an eye of 3.00 in 10y US notes - there continues to be issuance and noise about potential "buying stop" from overseas investors but ..........I like to be in opposition.

Going on winter holiday from tomorrow night will do one more post tomorrow....

Safe trading,

Steen

All you need in this life is ignorance and confidence; then success is sure. Mark Twain

This week-end I "wasted" some time reading Bill Gross' (I like the double meaning of Gross!) newest writing on why we should bail him and his investors out: http://tinyurl.com/cjqxya

I will have to warn you its waste of time, but its kind of interesting to see how a well paid, "well respected" investor like Mr. Pimco seems to think that the solution to all the problems in the world is for the US Government to buy asset he is long - there is no talk of the small matter of funding this small exercise- only then notion that spending money is good.

I guess its the financial equivalent of "The boy with the Golden trousers (http://tinyurl.com/dnhqz3).......

I find its perplexing that in a time where we need everyone to think positively about solutions then Wall Street and its derivatives continues to look for ways of lining their pockets with state subsidised money. For the record Gross is even intellectually wrong: In order to stop the rot in the financial markets we need to reduce debt to equity not increase Mr. Gross.....

Only by governments taking the ultimate loss' on their plans/packages will we get the economy flowing again.....but do not let facts disturb your arguments.

I am just back from longer business trip to: France, Switzerland, UK and Dubai. Different parts of the business cycle obviously but everywhere there is now clear indication that the word CRISIS is well established, in the UK so much that in the local bookstore, they now have whole sections titled: Dealing with the Financial Crisis..sign of the times I guess.

From Davos I get same reports; everyone is reporting how negative everyone is but they are all taking this as an indication the low is in ? I never really understood these types of arguments: Why get the supposely smartest people in the world to meet up and talk openly about the economic affairs only to dismiss them ?

Anyway I am with Soros (as always). Read this great FT piece please, pretty please: http://tinyurl.com/cyq7rr - explains a lot of things even for simple people like me.

David Karsbøl, my Chief Economist, have updated his excellent leading indicator model for World GDP Growth per Capita and the result is NOT GOOD.. it looks like we could see - 2.0% this year - first time in history- so in other words - be my guest fade the facts and the smart guys, I hope it works - but as always hope belongs in Church.


(Click on chart for bigger version)

Why there may not be "bubble" in yields

Everyone and his brother is subscribing to the concept that yields are too low, especially in government bonds. (http://tinyurl.com/calo3u)

....but it's all based on the concepts off:

1. Fiscal & Monetary policy works


2. Inflation

My firm believe remains that in times of rising unemployment levels everything becomes binary: its all ZERO and ONES.

If you lose your job you do not care where interest are going, what Bernanke thinks, What Obama does - No you want your job back and now!

Effectively right now we are in the path of the cycle where everything is ZERO's:

• Consumer confidence - 0


• Unemployment - 0


• Business margins -0


• Faith in banking system - 0


• Ability to maintain your job - 0


• Interest in Fed - 0


• Faith in Fed - 0

I think you get the picture - we got excess capacity in all business sectors, we got government busy printing & spending money not dealing with the problem, but getting reelected .......this is the true ingredients for deflation large -... meaning inflation will be ZERO at best minus 1% at worst(?).......

So now if monetary & fiscal policy have less tracktion plus DEFLATION....... a yield of 2.5% becomes 3.5% after inflation - I think it will compete very nicely with the return on the stock markets will considerable less volatility.

This picture is even confirmed technically. Below is the 10y notes yield in the US - it looks to me like we are in the 4th wave - looking for 300 bps roughtly before we make it into new lows for bonds... this also finally matches the theory of Q1 being excessive in issuance. I have been wrong before and carry no predictability but for now I will keep most of my money in fixed income as the alternative cost analysis (i.e being long stocks...) still costs me money.

(Click on chart for bigger version)

Strategy:

85% in cash/FI - short eurusd and eurjpy.... looking for break of 800-ish to sell S&P... still target for S&P @ 650-690.

Safe trading,

Steen

Back to basics....

Finally back from a busy travelling schedule ....... lots of ideas and thoughts... but for now I will once again do the easy thing and give you my interview done w. Bloomberg this week......

More here tomorrow/Monday.....


http://www.truveo.com/Investment-Strategy/id/229188125

Safe trading,

Steen

Denial is the new black....

I'm in Paris, Zurich and Geneva and there is one common theme: Denial.... financial crisis does not happen here, its somebody elses problem.... shopping is good, no pain.......

Meanwhile in Washington Geithner is also in denial.... I am so sorry I "forgot" to pay tax for 5 years........

The outgoing President Bush also claims..... He did a few mistakes but he left the US a better and safer place...

I must be from the moon...... I have travelled pretty much the whole world in the last three month and the only two places where denial is prevalent is Paris & Geneva/Zurich....

Another theme I found again and again was the morale hazard many company CEOs have created for themselves..... annoucing 2008 was a great year, no incoming crisis in sight...and now they are forced to not only cut marketing spending, expansion plan but most importantly making serious lay-offs..... the world is in the "winter phase", globalisation works, and it's time to face reality and move away from everything being based on hope....... (ands the non-change Obama stands for)


Position wise.. I still keep 75% in cash/bonds.... 25% applied negatively.....net short dax, s&p and eurusd mainly.... 650-690 the goal......both from technical perspective but also from bottom up analysis.... ( 50 US Dollar expected earnings in the S&P ...13 P/E (recession lows) equals.....650....)

I look forward to the market moving to more realisme as it would indicate conditions should be improving.. for now my key indicator remains unemployment as long as the velocity of lay-offs are accelerating.. I wil remain short.......

Safe trading,

Steen

It feels, smell & look like the week of the Lehman break down...

Short note as I am in Management meetings all day - the week-end packages have ZERO impact except crystalizing how insolvent the banks are and how they "underestimated" - another word for lying? the pressure of their credit facilitation.
In short: In smells, feel, and looks like the week that ended with Lehman bankruptcy....

Three banks involved in the bank bail-outs.. looks at their performance today!

http://biz.yahoo.com/rb/090119/business_us_financial.html?.v=20

(Click on chart for bigger version)

Barclays...


Danske Bank, Copenhagen


RBS - down 65% !!!!



Still same positions:

• 75% long cash & short-term fixed income
• 25% deployed negatively: S&P + Dax.......

Short EURUSD......

Safe trading

Steen