Pranjay Kaushal

Preparing for the Dollar's Next Down Cycle

Hi,
Few observations,
1) One can also look at CADJPY pair in relation to the Oil prices, both being the commodity currencies with CAD having high oil exports, and Japan being net high oil importer (99% of oil consumption imported), the pair can be used to suit one's own style of trading.
2) However commodities prices and industrial demand can be dubious indicator for one that existing inventories have reduced for the last quarter which saw less industrial production, so this might be temporary increase in production levels compared to previous months' low base (effect).
3) The retail sales ex-auto sales would rather give more accurate and sustained answer to the questions sighted above, the unemployment numbers also give a clearer picture.

But at this time I would still be wary of buying aggressively in stocks, I don't know: gut feeling or due to the gloom and doom all around!
One reason for this is that stocks have run a huge % since March lows far from justifying their forward earnings for this and next year-visibility for which is still cloudy.
Any comments?

Quantitative Easing: Is Japan Next?

I have few observations to make:
1. Japan already did QE in 2000 to fight deflation and US took a cue from Japan's lost decade and late usage of this policy, cut the lag time and did before-hand, impact of which remain to be seen.
2. Is there a possibility that financial de-leveraging bringing lot of money into the US system increasing M2. So can that money go into buying commodities etc. again causing ---> inflation ?
3. Leverage of 15 times++ would take some time to come, i.e risk aversion would be the mantra for a long time to come.
4. The US fiscal deficit was served by TIC funds, so that reducing continuously for three months, US people have to save to cover up the fiscal deficit (who else?); which i think needs a structural change ---that further means inflation going down big time.

Kindly reply or criticize, thank you.

The Ghost of Crude Oil Futures (Part 1/2)

If we say that OPEC countries cutting production as they cannot sustain at 30-40$, one needs to understand that the cost of production for an Onshore oil well is around 5-6$/bbl approx., and around14-15$/ bbl for off-shore production. Other charges included i.e. FOB price is what we see. Second, treating it as commodity would mean that as the recession in US, Europe and Japan deepens, which it will might bring the price of oil to less than 20$/bbl, and I think for sustained period of time. As there is always new oil discoveries, new more efficient technology development for auto etc. Please be cautious on derivative positions and hedge it well. Happy investing!