Global Macro Trading Journal

Quote from Kassz007:

Indeed. Whether they do or not doesn't even matter to me right now, I am profiting off of rumors alone. Sell the spikes, buy back on the retrace. Eventually BOJ will actually do something and that's where the real profit will be.
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yes, but you better be on the right side of the event, otherwise you will miss the real profits. Guys have been long usdjpy for months hoping that it goes up but its not budging. Profiting from BoJ actions also means that you don't sell rumour driven rallies like this, because eventually someday rumour will be correct and usdjpy will smash through and go up.

Basically I am saying - the way you are profiting from buying dips and selling rallies is probably a better way to profit from usdjpy rather than waiting for BoJ to act. If you just go long usdjpy all these months, you pay a lot in carry to your broker, which mostly negates the trade advantage that might come from BoJ's action.
 
Apologies if this has been discussed before, but I am a little out of my depth with the discussion regarding Prime X:

http://www.zerohedge.com/news/primex-time-next-subprime-trade-has-come

http://www.zerohedge.com/news/timberx

From the charts in the first link, it looks like a CDO of ARM mortgages (I could be wrong).

Is this correct?

If so, would the decline in Prime X hurt mortgage lenders the most out of all financials? eg. would it hurt BAC, RF, SNV (US banks) more than it would hurt MS, GS (US investment banks) or SocGen, BNP Paribas (non-US financials), using examples of three different types of financials?
 
Look for a webcast of Gundlach from this week. I didn't hear it personally, but heard he took time on the cast to basically destroy ZH's argument on the PrimeX.
 
I read through those two ZH articles again and found some more info.

This article describes Prime X:

http://www.zerohedge.com/article/wi...ing-be-reason-next-rmbs-and-thus-fha-collapse
"Will The New ABX Prime Index Be The Reason For The Next RMBS (And Thus, FHA/GSE) Collapse?" from December 2009

Markit description of Prime X:
http://www.markit.com/en/products/data/indices/structured-finance-indices/primex/primex.page

http://www.cnbc.com/id/44892166
"Mortgage Credit in 'Quiet Crash': DoubleLine's Gundlach"

Ralph: This article seems to suggest that Gundlach agrees with ZH's analysis.

CNBC video of Gundlach available from the above link. Direct link to video:
http://plus.cnbc.com/rssvideosearch/action/player/id/3000051068/code/cnbcinline/module/videoModule
 
Quote from gmst:

yes, but you better be on the right side of the event, otherwise you will miss the real profits. Guys have been long usdjpy for months hoping that it goes up but its not budging. Profiting from BoJ actions also means that you don't sell rumour driven rallies like this, because eventually someday rumour will be correct and usdjpy will smash through and go up.

Basically I am saying - the way you are profiting from buying dips and selling rallies is probably a better way to profit from usdjpy rather than waiting for BoJ to act. If you just go long usdjpy all these months, you pay a lot in carry to your broker, which mostly negates the trade advantage that might come from BoJ's action.
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I agree. Being long on a retrace at the "floor" just affords you the opportunity to be on the right side IF the BOJ was to act, which we all know is a reasonable possibility given past experience. I would not advocate buy and hold simply on the hopes of BOJ intervention alone, because as you say, who knows how long you could be waiting.
 
So, isnt the short the Euro trade the new short Japanese bond trade...


People keep calling t the most easy money there is to make yet it just won't stay down for less then a week.

I mean seriously what has to happen for it to really go down the crapper...
 
Not short the euro, but it did fall from $1.50 in May and from $1.45 just 6 weeks ago to $1.31. Nice bounce this month, though.

Arguing against shorting the euro is massive intervention by the Swiss, and yes, I believe the Chinese. I think Beijing is mopping up euros just as much as it mops up dollars. They may not have an official peg to the currency, but they don't want to see it go down any more than they want the greenback to go down.
 
Quote from m22au:

I read through those two ZH articles again and found some more info.

This article describes Prime X:

http://www.zerohedge.com/article/wi...ing-be-reason-next-rmbs-and-thus-fha-collapse
"Will The New ABX Prime Index Be The Reason For The Next RMBS (And Thus, FHA/GSE) Collapse?" from December 2009

Markit description of Prime X:
http://www.markit.com/en/products/data/indices/structured-finance-indices/primex/primex.page

http://www.cnbc.com/id/44892166
"Mortgage Credit in 'Quiet Crash': DoubleLine's Gundlach"

Ralph: This article seems to suggest that Gundlach agrees with ZH's analysis.

CNBC video of Gundlach available from the above link. Direct link to video:
http://plus.cnbc.com/rssvideosearch/action/player/id/3000051068/code/cnbcinline/module/videoModule
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Well, I think where Gundlach disagrees with ZH is that he believes PrimeX going down is just indication of risk spreads going wider, while ZH would like to believe something systemic is building again.

I would tend to agree with Gundlach. Unlike 2007, there isn't an AIG out there with a $1T or more notional short in ABX, with no capital to back it up. Yes, RE sucks, we all know that. PrimeX going down means there are some winners and some losers, but nothing that's going to collapse the system. Look elsewhere for that. Generals always fight the last war.
 
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