April 2010 Monthly Archive

Key News & Comment Hodge Podge

The straight jacket of the euro is what we call this. I wonder how many politicians within the fiscally broken states have the courage or the ability to force these kinds of internal adjustments. It may be a lot easier to just leave the euro and devalue accordingly. Can you say Drachma, Lira, Escudo, and Peseta? Read more

Arizona Boycotts the Peso

When the “moral champions” of the world gang up on Arizona, Arizona sells pesos. That seems to be what happened this week in the wake of Arizona’s crack-down on illegal immigration. Read more

Brazil is loved, but how much is priced into that perception?

Gotta love that quote: “…simply transferred from one perception to another.” It really does sum it up well. We know Blue Horse Shoe loved Anacot Steel…we know gold bugs love gold…we know commodities bulls love all things commodities…and we know Morgan Stanly loves Brazil… Read more

Special Report Reprint

The only question we have is whether or not the euro goes to par quickly on some type of Eurozone crisis, or just grinds lower and lower in the months ahead. Either way, we want to remain positioned short the euro against the dollar and ride this move for all its worth. This research piece lays out the key reasons why we are confident in that view. Read more

If our $ call is right, correlations may change big time!

Our longer term dollar call for a while now is simply this: The US dollar entered a multi-year bull market after bottoming in March 2008. If that proves correct, it is likely we will witness some major changes in correlations that seemed to be such layups during the US dollar 7-year bear market phase. Read more

A bunch of horses from the same smarmy stable

Milton Friedman said, “a central bank can control its exchange rate, it can control its interest rates, and it can control its money supply/inflation. But it can’t control all three at the same time.” Read more

“Fiscal Fears Mount”

At least that’s how part of a Reuters headline reads this morning, referencing the latest IMF report released this week. Read more

When Brazil joins the discussion, then it must be …

Gradually put in place a managed floating exchange rate system. Apparently that’s what Chinese President Hu Jintao said in a speech at a BRIC summit last week. Smooth, huh? Read more

Long rates go lower!

Is bond worry all wet? I got caught up in the expectation of a surge in long bond yields, which hasn’t materialized. Being in the deflationary camp, it was a dumb assessment on my part. I think the perennial bond worry-warts have it very wrong again. For sustenance on our deflation view we turn to Van Hoisington and Lacy Hunt. Read more

Long rates go lower!

Is bond worry all wet? I got caught up in the expectation of a surge in long bond yields, which hasn’t materialized. Being in the deflationary camp, it was a dumb assessment on my part. I think the perennial bond worry-warts have it very wrong again. For sustenance on our deflation view we turn to Van Hoisington and Lacy Hunt. Read more

Which side of the trade was God on Mr. B?

Since the break of the Goldman news, CNBC has turned itself into all-Goldman-all-the- time. So, I preface this by saying there isn’t too much left to say, given what we do know now, but it’s just too darn fresh not to say something… Read more

Does this thing come with an escape hatch?

This ain’t your grandfather’s business cycle despite growing confidence about the coming V-shaped recovery. Read more

A new twist on The China Syndrome

First, “Do not let the yuan’s exchange rate issue become the scapegoat of U.S. domestic economic problems, including their unemployment,” said a Chinese Ministry of Commerce spokesperson. Read more

I want to know only one thing: Are Bush, Paulson, and Snow long or short?

We noticed the comment from Jim Chanos, he of hedge fund fame and loudest bear on China. He told Bloomberg that China was on a “treadmill to hell.” I would add, if China becomes the hegemony power we are all on a treadmill to hell, but I digress. Read more

Two Kinds of Dumb …

Minus the chance that some lunatic is streaking through your living room, I think the pearls of wisdom in the above quotable can easily be applied to so many real-life situations these days. Read more

Seven Stages of the Dollar

It’s always difficult to pinpoint where we are in terms of a trend. Long-term trends in the currency markets have ranged from six to ten years, measured by the various bull and bear markets in the dollar since the inception of the free-floating currency market back in 1971. Read more

Even gold agnostics must never say never!

Where does one hide if bond markets everywhere look risky at the same time? In another excellent article by Ambrose Evans-Pritchard at the UK Telegraph, sent to us by a friend, Ambrose summarizes the latest very scary warnings from the Bank of International Settlements about sovereign debt crisis Read more

Can you say “contagion” boys and girls? Sure, I knew you could!

Okay, this morning I am going to present a series of charts. Let’s play: Guess that country? Here is a hint: It is not China. Read more

Asian block currencies poised to appreciate

It is about time China hikes rates. With inflation likely bubbling, and growth smoking, a hike by China would be no surprise. We have been expecting the same from central banks across Asia given their relatively high growth and low interest rates. Read more

Japanese yen Double Whammy: QE from the BOJ and Exports to the US

Playing for Japanese yen weakness is one of our favorite long-term trades at Black Swan Capital; besides being short the euro against any other currency with a pulse. The yen has started to weaken against the pack–finally. Read more

FX Trading – Gold: Time for a little dirt nap?

Other real (physical) asset investments in the real economy (land, plant, equipment, etc.), that appear relatively cheap at the beginning of recovery thanks to the impact of recession, compete with gold as an investment class once again. Read more

Zoom-zoom growth: Comdols supported, but we like Euro-block pairs

Well, if true, stocks did it again. They forecasted a recovery. The optimists have been right; piling into stocks with confidence as they climbed the proverbial Wall of Worry. The worry warts (guilty as charged) look like they were wrong; especially if the China credit bubble concerns prove untrue. Read more