Global Macro Trading Journal

[ralph00]

Quote from m22au:

Ralph you might be interested in this article about a long-term investment in XOM:

http://seekingalpha.com/article/283613-sell-the-10-year-u-s-treasury-and-buy-exxon-mobil-instead

Yep. Math doesn't lie.

There is no question if my son were 13 and had a few K in Bar Mitzvah money, I would have him read the Snowball and then advise him to spread the money out around the 5 stocks I mentioned. He'd be a fairly wealthy man by the time he turns 30.

I haven't pulled the trigger yet on XOM or CVX because both have had big runs thanks to the Bank of Bernanke. I could see them getting hammered if the Beard finds his hands tied for further money printing and oil drops 20%. I will likely be an owner of both sometime in the next 12 months.

 

[m22au]

Quote from ralph00:

Yep. Math doesn't lie.

There is no question if my son were 13 and had a few K in Bar Mitzvah money, I would have him read the Snowball and then advise him to spread the money out around the 5 stocks I mentioned. He'd be a fairly wealthy man by the time he turns 30.

I haven't pulled the trigger yet on XOM or CVX because both have had big runs thanks to the Bank of Bernanke. I could see them getting hammered if the Beard finds his hands tied for further money printing and oil drops 20%. I will likely be an owner of both sometime in the next 12 months.

that's the silly world we live in. Economic weakness causes "risk-off".

Then more money printing and it's risk-on again.

Funnily enough when I studied economics and finance at university, there wasn't a subject called "Kleptocracy, bailouts and money printing 101".

 

[m22au]

Quote from m22au:

USD/CHF new low 0.7725 and CHF/JPY heading towards 100.00

all this despite Spain and Italy yields well off their highs

CHF/JPY 100.01

here we go again ...

 

[Martinghoul]

I am getting so absolutely sodomized by CHF, it's not even funny any more.

 

[m22au]

Quote from Martinghoul:

I am getting so absolutely sodomized by CHF, it's not even funny any more.

It is crazy, because the Swiss could intervene and clear out a lot of CHF longs.

But for now USD/CHF is even stronger than gold/USD. Obviously this makes EUR/CHF super stronger than gold/USD.

At what point will intervention come? EUR/CHF parity? that's a nice big round number to defend.

 

[gmst]

SNB is not going to intervene till the time uncertainty lasts (debt deal in senate, rating cut, and Italy's, Spain's yields). The statements are not strong - they are not indicating their strong willingness to act. However, they might decide to come in the market to defend parity, imo. I will rather be long eurchf than short at this time, trying to make 2-4 big figures relief rally. This also eliminates SNB risk, if any.

My bottomfishing in eurchf turned out to be very short term correct and eventually wrong call. Closed that position, but again long from 1.0955.

 

[m22au]

Question for people smarter than me:

I'm trying to think a few steps ahead of how the Italy situation resolves itself, assuming that things don't get better.

If the EFSF expands to some big number (eg. 2 to 3 trillion EUR) in order to help Italy and Spain, where does that "money" come from?

ie, assuming Germany approves this increase (debatable), would the Eurozone countries (mainly Germany and France) all borrow additional amounts to cover the additional contributions? Or would the ECB just print an extra 2 trillion Euros?

 

[Daal]

Quote from m22au:

Question for people smarter than me:

I'm trying to think a few steps ahead of how the Italy situation resolves itself, assuming that things don't get better.

If the EFSF expands to some big number (eg. 2 to 3 trillion EUR) in order to help Italy and Spain, where does that "money" come from?

ie, assuming Germany approves this increase (debatable), would the Eurozone countries (mainly Germany and France) all borrow additional amounts to cover the additional contributions? Or would the ECB just print an extra 2 trillion Euros?

I dont think the ECB would finance a cent of that. Germany and a few others would have to borrow which might start to lead to issues on confidence with German debt

 

[m22au]

Quote from Daal:

I dont think the ECB would finance a cent of that. Germany and a few others would have to borrow which might start to lead to issues on confidence with German debt

This possibility (Germany borrowing to finance increase in EFSF) makes things *interesting* for bunds if and when it happens.

Obviously there is the massive political component - ie, could Germany approve a big increase in EFSF contributions given voter backlash?

 

[Daal]

Quote from m22au:

This possibility (Germany borrowing to finance increase in EFSF) makes things *interesting* for bunds if and when it happens.

Obviously there is the massive political component - ie, could Germany approve a big increase in EFSF contributions given voter backlash?

I dont know much about German politics but it seems to me that Merkel already knows she is toast, so she has nothing to lose by borrowing more