Melancholy Korean

Contrarian Trading Tips: Gold, the Dollar, Energy and Financials

"but I believe buying low and selling high is the objective"

that would be the first mistake. trying to outsmart the market is the mark of a novice or a fool--a well-capitalized and lucky fool, perhaps, but still.

Russia invading Georgia is def a big deal for oil and gold, you may get a bounce to get out of underwater long positions, but dollar strength is real.

What's Next for the U.S. Dollar?

nice article. the US may be in a bad spot, but in a relative game, it's how we are doing versus, say, Europe, that matters. and they're behind the curve with rates. as you note, "cold commodities" reinforce dollar strength. and if the carry trade starts getting unwound...

Will the Fed Actually Raise Rates Next Week?

Will the Fed raise rates next week?

No.

Historic Financial Collapse Underway?

If you want to play the bankruptcy game and buy puts, let's see, the 10 delta put in FNM for September expiry, the 5 strike, looks like it's trading for .80 cents, which works out to an implied vol of 230. It's low delta, not much gamma to trade, even if the stock's realized vol the last few days has been up at crazy levels. It's more of a binary option on the equity going to zero, ok, I get that, so maybe you don't care the break-even is 4.20, but do you really want to gamble on the timing like this?

The only bankruptcy that buying puts outright is good for is the personal kind. If you want to gamble, go to Vegas. It's a hell of a lot more fun.

Dollar Falls to Record Low Over Fannie and Freddie

"Her calls change on a daily basis and she has zero experience."

Can't speak about her experience, but it's clear you don't have any.

Are you someone (not a trader, clearly) who has to be right about the market every day? Even better, you ARE right about the market every day, right? Why so bitter, then? Been buying FNM on the dips 'cause you just know it's a great company? Married to that long dollar position?

It is Time to Go Long the Dollar?

Agree with the first commenter. At first I thought I was reading, by mistake, an article from a few weeks ago. If you are claiming a "long term" shift, well, I agree with you that the dollar is one of the few assets not overvalued these days. But trading is about timing, yes?

And the timing has gotten a lot trickier since the Fed and ECB are playing games and are themselves confused about what to do. "Murky" is right.

Your article doesn't help to clarify any of the confusion.

Euro Rallies to Three-Week High Vs. Dollar

US dollar. sigh. why so weak and sickly, babe?

End of Quarter Dollar Assessment

"Those who know don't say, and those who say don't know."

The Budget Deficit and Declining Dollar

"I also think I am now one step closer to understanding Democrats, but I digress."

Look, I'm a Republican too, but that's a cheap shot. Half our budget goes toward the military. Where was our party, or at least the fiscal conservatives, as opposed to the "neoconservatives" (neo-Trotskyites) on the Iraq war? Talk about a truly idiotic use of our funds. And the Laffer curve? That was pushed hard by Ronald "Reagan" (or did you meant Don Regan)? In any case, both of 'em.

Not that the Dems have any answers. The housing bailout bill is only going to prolong the adjustment in prices that needs to take place. Whether it happens in four quarters or four years or forty years, eventually, prices will have to fall back to reasonable levels.

Is the Fed Being Hawkish Enough?

Still amazing to me Tricky's gonna raise rates in this environment. Germany (apparently Spain, Italy, Ireland don't count in the ECB's thinking) is now starting to show signs of a downturn, and they will go down as hard as the US. But while the American system has a lot of flaws, and is prone to booms and busts, our labor markets are flexible enough for us to adjust quickly.

1.3 trillion in mortgage losses? Whatever. As Michael Milken said at the Global Conference, we've had trillion dollar losses before; hell, we've had at least three of 'em in the past twenty years (Texas real estate, SNL crisis, dot com). The history of American capitalism is made up of booms and busts. As long as we let the system take the losses, as long as the we let the players adjust without trying to cushion the pain through regulation and artificial props (can you say Dodd housing bill?), the faster we will get out of the coming recession.

"However in the longer term, the US dollar has bottomed out alongside US interest rates and it will only a matter of time before it begins to trend higher once again." Absolutely agree. Of course, it's all in the timing!

OPEC's Move to Devalue the Euro

gonna be a bumpy ride, especially with Tricky playing his stupid power games, but I think you're right. Dollar's still got room to strengthen, oil is overvalued, but shorting euro - dollar is a safer way to play than shorting oil. oil is now in stupid bubble territory. explosive upside moves, even to ridiculous levels like 200 or 250--that Russian oil minister think he's Henry Blodget?--are no longer off the table. but eventually, oil (tulips, corn, wheat, silver, gold, tech, housing, energy stocks, Nifty Fifty, South Sea Trading, railroads) will come crashing down.

The Push for a Stronger Dollar

Come on, USD. You can do it. I think I can, I think I can.

Thanks, Bernanke and company. You're gonna save us from that smelly French man, after all!

Bernanke Hoping Increased Dollar Will Ease Inflation

"guns blazing" is right on. get outta the way of this train.

ECB Avalanche May Bury Inflation Concerns in a Recession

Finally, finally. Thank you. Ultimately, the moral indignation that Europeans feel at the thought that the US might be pissed by Tricky's comments this past week miss the point. It's not some great pissing contest (which, of course, the Europeans would lose, since we have a bigger army and the willingness to use it.) It's about a sensible policy for the Europeans themselves.

"But oil and energy prices are one of the main drivers of European and worldwide inflation. The price of crude had fallen to below $122.00. On Friday it closed at $138.54. The dollar lost 2.6% against the euro on Thursday and Friday; the price of oil rose more than 8.4% on Friday alone. The Thursday and Friday rise in oil on the New York Mercantile Exchange was a record for the exchange.

"The ECB has damaged its own case against inflation. What will generate higher inflationary expectations more than a sharp hike in gasoline prices? Would not a sustained 15% or 20 % drop in the price of oil do more to counter inflation in Europe than threatening to push a rate increase on a slipping European economy? Will not higher energy prices further undermine European GDP and fracture consumer spending?"

Bernanke's Backfire: Now What?

I think it's called a telephone. You can use it to talk to people, like, oh, I don't know, central bankers in Europe and Asia.

Great article. Painted into corner is right on. Raising US rates now would be suicidal, not raising rates devastating, letting the ECB lead the way depressing (literally).

Two questions:
(a) did the probability of Euro going away tick up ever so slightly this past week?
(b) why is monetary policy always cast in moral terms? Strong medicine, "toughness," etc etc.