Emerging Market FX Questions

Having heard many questions being asked about EMFX (most of which have been answered by new Armchair EM Generals using their favourite  tools of rearview mirrors and extrapolationist rulers), we thought we would ask some more important ones.

If you had 200 USDs worth of Turkish Lira in your hand would you :-

- Look at them as if someone had placed a turd in your hand screaming "Arrgh!"
- Place them in a Turkish Bank and watch your savings grow by a newly exciting 12% p/a.
- Buy corporate bonds in Turkish company Arçelik (controlled by Koc Holding) and display them amusingly on your toilet wall.
- Convert them to USD and find you've now only got $100.
- Buy a small coffee in Bodrum and have to cover the difference in Euros.

If you had 200 USDs worth of Russian Rouble in your hand would you :-

- Look at them as if someone had placed a turd in your hand screaming "Arrgh!"
- Donate it to Mr Putin's retirement home for sick puppies.
- Check your wallet for receipts to work out where the hell you were last night.
- Convert them to USDs and find that you have only $20 and a menacing look from Yuri the money changer.
- Buy a small bottle of water in Moscow and pay the difference in Euro.

If you had 200 USDs worth of South African Rand in your hand would you :-

- Look at them as if someone had placed a turd in your hand screaming "Arrgh!"
- Call up Charlize Theron and tell her dinner is on you.
- Convert them into USDs and promptly get arrested by over zealous FBI for money laundering.
- Buy shares in a local gold mine and go back to writing comments on Zero Hedge.
- Buy half a gram of Biltong and pay the difference in Euro.

If you had 200 USDs worth of Brazilian Real in your hand would you :-

- Look at them as if someone had placed a turd in your hand screaming "Arrgh!"
- Hide them from your wife.
- Ask if they're like Bitcoin as you've never heard of them.
- Sell them and buy US bonds in nice Mr Gross's fund as he suggests.
- Buy a ticket to watch the World Cup on a TV in Joao's favela bar, paying the difference in drugs.

If you had 200 USDs worth of Indian Rupees in your hand would you :-

- Look at them as if someone had placed a turd in your hand screaming "Arrgh!"
- Have managed to sell insurance to 50 Sky customers in the UK from your cold-call center in Bangalore.
- Find your old rucksack and head off to relive your hippy days in Goa in a cloud of smoke.
- Trade the 3mth vs 6mth INR NDF as a rate hedge and find the spread cost you more than the face (due to market volatility sir, sorry).
- Buy a British car company and be given a sweetener by the UK government of £1m to go with it.

If you had 200 USDs worth of Hungarian Forint in your hand would you :-

- Not worry because it's a surplus country 'innit.
- Resurrect the trusty solvency issue and scream "Arrgh!"
- Give them to Boglárka the au pair to take home to her parents in the mountains.
- Arrange Dave's stag (batchelor) party in Budapest (when there is no Dave).
- Buy a quarter bottle of Tokaj 7 puttonyos and pay the difference in Swiss mortgage bonds.

If you had 200 USDs worth of Chinese Renminbi in your hand would you :-

- Celebrate as it’s going to be worth even more USDs.
- Offer it to a passing group of HF managers who politely decline it already owning 300bio of their own.
- Buy USDs then USTs, not because you listen to PIMCO but because you are SAFE and that's what you do anyway.
- Buy 50 LED lightbulbs off Alibaba and find they are rubbish.
- Buy a Louis Vetton bag from a Beijing street hawker and borrow the difference from a local official.

And finally -

If you had 200 USDs worth of USDs in your hand would you :-

- Use them as margin to go short of all the above.
- Buy any of the above as one day you'll need their country as a tax haven.
- Rejoice you got a bonus no matter how small.
- Call your friends and ask if you left the other $800 on the bar.
- Buy a Senator funding the difference by issuing subprime debt that is bought by the Fed.

Next Post »


Click here for comments
January 30, 2014 at 8:41 PM ×

You omitted: 200 USDs worth of Ukrainian Hryvnia in your hand .... [insert 1) comments about young ladies of the Ukraine and their favorite fields of employ and 2) Chernobyl-based jokes about radioactivity or 3) veiled references to the availability of polonium tea in Kyiv.]

+10 for the Turkish company Arçelik - excellent, Pol, we know you've been saving that one up in your file of "useful words to enliven the blog".

January 31, 2014 at 10:28 AM ×

Thank you for this - very funny. Thanks to LB also, as I did not get the Turkish company reference at first. Head now filled with unsavory images.
Visited Kiev before the medieval battles started (did anyone else see the trebuchet the demonstrators built?) and visited the old SS-18 missile base a few hours from the city. Could be the most spine-chilling experience of my not-so-young life.

January 31, 2014 at 7:41 PM ×


Your Risk Proxy EURJYP is putting on some makeup for a date with the 135 level? Maybe even lower. Not a good sign.

January 31, 2014 at 8:56 PM ×

We recently took up with her sister USDJPY. The pair of them have been going down like a bar girl in Bangkok. Still, the 102¥ level has held so far, which suggests that a decent bounce in spoos and rates will likely ensue Monday - unless the ISM is truly of the recessionary persuasion, in which case Mr Market will be riding the porcelain bus.

This week has been the week from Hell, as described in our popular new book: "Getting the Macro Right and Being Bitten in the Arse by Your Hedges".

February 2, 2014 at 1:46 AM ×

Happy New Year Everyone!

Year of the Horse

My fortune Cookie..

Choose wisely in the realm of the self interest and the co-interest.

Now back to my holidays, yep , you can always count on the rise over run..fuckyoufucker!