Zowie!

Well, the Fed slammed the door on the tightening bias, somewhat to Macro Man's surprise. Perhaps you can take Ben out of the helicopter, but you can't take the helicopter out of Ben. Regardless, we are now getting the requisite risky-asset lovefest that generally ensues when the Fed finally takes its foot off of the monetary brake.

The repurchase of the puts was obviously the wrong decision, and now some other hedges will likely be jettisoned, starting with the short Turkish equity position tomorrow morning. In the meantime, Macro Man sells $20 million USD/MXN at 11.0350 spot basis, 11.0420 to 04 April. CTAs are long USD/MXN and likely to exit very, very soon.
Previous
Next Post »

4 comments

Click here for comments
OldVet
admin
March 21, 2007 at 7:41 PM ×

Zowie indeed. I ate my Shorts too, tasted crappy even though they were very expensive. The fix is in for now, no question BoJ and Fed have been on the phone with Wall Street primaries again. I've got some very nice long positions that'll help heal the wounds till US consumers start bypassing Walmart. Then it's time to buy new Shorts. (I have reserved one short on EM stocks for now, may keep or dump depending.)

Reply
avatar
Banker
admin
March 21, 2007 at 11:19 PM ×

Marco Man ...You said it...Zowie !!

This to me signals a clear path as I see the U.S. economy sloweing over the coming months. Buy Emerging Market Currencies and look for rates in EM and the U.S. to come down. The Euro should be a buy also.

Reply
avatar
Anonymous
admin
March 22, 2007 at 12:48 AM ×

when the BoE had an 8:1 vote at their meeting I had a very strange/funny feeling about the Fed today .....

they're seeing something leading to lower inflation on both sides of the pond

Reply
avatar
OldVet
admin
March 22, 2007 at 8:33 AM ×

The something leading to lower inflation is called economic slowdown, clearly.

Reply
avatar