In 2004, after getting stopped out twice with no logic following the upmove, I backed off completely and played pairs that had a right to move up against the dollar. Like the CAD.
These calls for "imbalances" to correct are always hilarious. Do you know what it would take for the imbalances to be corrected? Oh, I don't know, perhaps a Euro move to 1.50? Do you have any idea what that would do to the EZ economy? How about a Loonie of .90? Hell, Canadian manufacturers are already screaming about their ability to compete. Or maybe a yen of 100 would be better? Or 93? I'm sure Japan wouldn't mind that happening!
This is pure stupidity. Everyone is focusing on the US imbalances, forgetting that there are massive structural problems in the EZ that are only ignored as long as the EZ shows signs of possible growth. And the only way they can show signs of growth is to NOT have their currency explode off the radar. It's a double edged sword.
I saw a news release today about how talk is circulating about the ECB perhaps hiking a 50bps rise now. Haha! What a good laugh. A month ago they weren't sure about moves at all, and Trichet himself said "we'll have to see how things go, but we won't be embarking on a steady rate rising campaign". Now Captain Caution is gonna pull a 50bps trigger? Riiiight.
People are so stupid when they're in the "herd" mentality. Sure, there's money to be made when following the stampede. But people inevitably get crushed when the stampede suddenly turns into a different direction. Fear is ALWAYS a greater motivator than greed.
These calls for "imbalances" to correct are always hilarious. Do you know what it would take for the imbalances to be corrected? Oh, I don't know, perhaps a Euro move to 1.50? Do you have any idea what that would do to the EZ economy? How about a Loonie of .90? Hell, Canadian manufacturers are already screaming about their ability to compete. Or maybe a yen of 100 would be better? Or 93? I'm sure Japan wouldn't mind that happening!
This is pure stupidity. Everyone is focusing on the US imbalances, forgetting that there are massive structural problems in the EZ that are only ignored as long as the EZ shows signs of possible growth. And the only way they can show signs of growth is to NOT have their currency explode off the radar. It's a double edged sword.
I saw a news release today about how talk is circulating about the ECB perhaps hiking a 50bps rise now. Haha! What a good laugh. A month ago they weren't sure about moves at all, and Trichet himself said "we'll have to see how things go, but we won't be embarking on a steady rate rising campaign". Now Captain Caution is gonna pull a 50bps trigger? Riiiight.
People are so stupid when they're in the "herd" mentality. Sure, there's money to be made when following the stampede. But people inevitably get crushed when the stampede suddenly turns into a different direction. Fear is ALWAYS a greater motivator than greed.
