Asians used to worry about counterfeit “Benjamins.” Now, they’re frightened of the real thing.
Think of this as ground zero of Asia’s fast-growing love affair with gold -- and a sign the dollar’s stability this week won’t last.
Source: http://www.bloomberg.com/apps/news?pid=20601039&sid=a_1UjBOzaP_g
“For nonprofits, this is going to be written up as a case study of what not to do,” said Mark Williams, a finance professor at Boston University, who specializes in risk management and has studied Harvard’s finances. “Harvard throws itself out as a beacon of what to do in higher learning. Clearly, there have been major missteps.”
Most of the wrong-way bets were made in 2004, when Lawrence Summers, now President Barack Obama’s economic adviser, led the university.
Derivatives have infected nearly every facet of finance around the global. Expect infinite QE to continue unabated regardless of suggestions of spin to the contrary.
Source: http://www.bloomberg.com/apps/news?pid=20601087&sid=aHQ2Xh55jI.Q
"If it doesn't fit, you must acquit," - Johnnie Cochran
If this was the end of the mother of all carry trades, the retest of the previous swing would not have occurred on 13% contraction in volume. The contraction of volume suggests waning force at critical resistance. A multi-month counter trend rally would have no trouble smashing through resistance on a massive volume spike or what technicians call a sign of strength. This one does not fit the hype thus far.
U.S. Dollar Index ETF (UUP):
Although the package delivery company expects a modest economic recovery next year, FedEx said "there is some uncertainty regarding the sustainability of current demand trends after our peak shipping season."
The dollar is rallying because Federal Reserve indicated that it would start pulling back some emergency supports as the economy improves despite the fact that FedEx see uncertainly regarding the sustainability of current demand after the holidays. The Federal Reserve, obvouisly talking up the dollar, conveniently omitted a timetable or indication of the size of the withdrawal in comparsion to the monsterous monetary injections that have already taken place.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.
How long will the market let them maintain this position? The action in the bond market as defined by TBT (Double Inverse Long Bond), continues to suggest a trend in transition. The longer TBT trades above 47.5-48, the greater the probability of another upside move. A move that would push 30-year yields to 4.5-4.6%.
TBT:
30-YR:
Source: http://www.federalreserve.gov/newsevents/press/monetary/20091216a.htm
Fed holds rates at record low, pledges to keep them there for `extended period'
Still, Fed Chairman Ben Bernanke and his colleagues gave no signal that they're considering raising rates anytime soon. They noted that consumer spending remains sluggish, the job market weak, wage growth slight and credit tight.
Companies are still wary of hiring, they said.
