Global Macro Trading Journal

Quote from Daal:

Look at the brazilian real, I losing money on my non BZF, precious metals exposure. Even though I'm hedged with a basket of currencies(many of them commodity currencies) yet the real continues to climb against them. My luck is that I have some of my costs in USD(I import a lot) plus I plan to do international traveling so some of my future expenditures will be in USDs, EURs, etc but still, this currency is fucking amazing

I'm growing convinced its some kind of bubble, on a PPP basis it seems to be overvalued by 30-40% against the USD(By the big mac index, I'd agree its not the most scientific way of measuring it). Plenty of other commodity currencies aren't overvalued at all against the USD

There is the high real interest rates but they have been coming down over the years as people grown more confident there won't be hyperinflation. At some point this mini bubble needs to pop
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Daal, you think it's more easy for Americans or people living in USD using countries to generate positive return on their capital because everything is denominated in USD?

Really all Americans had to do these last 10 years to generate extraordinary returns was to get out of their currency no...
 
Quote from Debaser82:

Daal, you think it's more easy for Americans or people living in USD using countries to generate positive return on their capital because everything is denominated in USD?

Really all Americans had to do these last 10 years to generate extraordinary returns was to get out of their currency no...
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I'm not sure I agree. In order to get out of your home currency and that a FX exposure you need some kind of trading insight that tells you its positive expectation to do that. If you are good at having those insights than you could have shorted USD/Anything and made that money. I could argue that lots of americans got lucky by having their wealth outside USDs so in that sense 'it was more easy' but if they dont realize they are being lucky they will lose money or underperform in the long-run anyway giving that easy money back
 
Quote from Butterball:

Little entertaining blast from the past here. The ECB's Axel Weber talking to Liesman at Jacksonhole 2008 lecturing Liesman on the ECB's glorious inflation fight... approx. three weeks before Lehman went belly up:

http://www.youtube.com/watch?v=l2uBylcBEEo
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Hindsight is 20/20. Liesman will one day occupy the same spot in the state-run mouthpiece fool pantheon as Baghdad Bob.

I'm so tired of the meme that the ECB made some sort of mistake in 2008 by jacking rates. The only people who have the right to say that are those who were short up to their eyeballs financial shares, long treasuries (and didn't get shaken out by the massive bear moves in government securities during that period), short oil up the wazoo, long the dollar to the moon, and stayed that way during the massive swings against them. Unless you're John fucking Paulson, please STFU.
 
Quote from ralph00:
Hindsight is 20/20. Liesman will one day occupy the same spot in the state-run mouthpiece fool pantheon as Baghdad Bob.

I'm so tired of the meme that the ECB made some sort of mistake in 2008 by jacking rates. The only people who have the right to say that are those who were short up to their eyeballs financial shares, long treasuries (and didn't get shaken out by the massive bear moves in government securities during that period), short oil up the wazoo, long the dollar to the moon, and stayed that way during the massive swings against them. Unless you're John fucking Paulson, please STFU.
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Huh? This makes no sense...

I can state that the hike was a mistake, regardless of my position.
 
Quote from Martinghoul:

Huh? This makes no sense...

I can state that the hike was a mistake, regardless of my position.
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You don't think my nana deserves some more intrest on her savings?

How is she going to keep paying for her living expenses when inflation is eating away her savings.
 
Quote from Debaser82:
You don't think my nana deserves some more intrest on her savings?

How is she going to keep paying for her living expenses when inflation is eating away her savings.
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Well, your nana's (as well as yours and mine) standard of living has to decline, no matter how you slice it. We've been living the good life and it's time to pay for it. How that's gonna happen, whether through inflation, higher taxes, lower pension payours, reduced standards of healthcare or other ways, is a question of secondary importance. Which particular way you prefer your pain administered would largely depend on what you think is fair.
 
Quote from Martinghoul:

Well, your nana's (as well as yours and mine) standard of living has to decline, no matter how you slice it. We've been living the good life and it's time to pay for it. How that's gonna happen, whether through inflation, higher taxes, lower pension payours, reduced standards of healthcare or other ways, is a question of secondary importance. Which particular way you prefer your pain administered would largely depend on what you think is fair.
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I agree 100%.

So in my view there is no right or wrong, it's all a matter of ideology.

Some people think one should go to jail 20 years for breaking in, others think 2 years will suffice.

The same goes for monetary policy.

Save the savers <-> They should feel lucky their bank is still standing.

Take a pick.

My nanna has a very diversified portfolio btw, If you can call 30% in gold and silver stocks diversified that is. :D
 
Quote from Martinghoul:

Huh? This makes no sense...

I can state that the hike was a mistake, regardless of my position.
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Well of course you can, in hindsight. Despite your know-if-all attitude, you don't know. You Don't Know.

Perhaps if all central banks had hiked earlier and stronger, commodities and oil wouldn't have exploded up into a weak economy in 2008 and we could have avoided the worst of the collapse. You Don't Know.

Here's what we do know: central banks hiking rates do not cause economic collapses. Booms cause busts. Repeat. Booms cause busts. To argue or even hint that 25 or 50 or 100 basis points in either direction is the difference between things going swimmingly and an epic bust borders on insanity.
 
Quote from ralph00:
Well of course you can, in hindsight. Despite your know-if-all attitude, you don't know. You Don't Know.

Perhaps if all central banks had hiked earlier and stronger, commodities and oil wouldn't have exploded up into a weak economy in 2008 and we could have avoided the worst of the collapse. You Don't Know.

Here's what we do know: central banks hiking rates do not cause economic collapses. Booms cause busts. Repeat. Booms cause busts. To argue or even hint that 25 or 50 or 100 basis points in either direction is the difference between things going swimmingly and an epic bust borders on insanity.
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First of all, I am sorry that my attitude isn't to your liking. I don't see anything wrong with it, so I'm afraid there's nothing I can do to help.

Secondly, yes, of course it's all hindsight and of course I don't know. However, the past is the *only* empirical guide to the future we have, which suggests it's not to be neglected. So while I know that I don't know, it doesn't mean that I intend to stop forming opinions on these issues.

Finally, nobody, especially not myself, is arguing that the ECB hike caused any sort of a bust. The only thing I say is that hiking 25bps only to cut aggressively a couple months later shows either a) lack of forecasting capability, if their mandate is medium-term price stability; or b) that their mandate is short-term price stability, i.e. making sure that current HICP doesn't exceed their tgt too much.
 
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