Internet2k4

Wednesday Outlook: Commodities, Global Markets

The 3X funds are fun - I like minimizing absolute exposure for a cheap ticket on the roller coaster. After pulling the trigger too soon around $100, I managed to average into FAZ at $58 these past weeks and fully unloaded it between $82 and $88 yesterday - noticing the trading-screen opportunity accidentally, on an Obama-screen afternoon.

Re C and MS, and the rest, I feel like Eddie Murphy: "I can't be mad at you!" for taking history's biggest tax refund and using it to short the world economy instead of lending it to more losers. It's been a mean old (morally hazardous) world. Now that Vice-President Caligari and his Somnambulist Commander-in-Chief are gone, who knows? Maybe the guy in the driver's seat is actually in charge.

10 Things to Consider Before Investing in Forex

I tried a reputable dealer's demo account (not yours) and was continuously electronically nagged to get into the game for real - the butting in by the service provider was so bad I never did sign up. On my medium term time frame for trading, I'm happy enough with the CurrencyShares ETFs, and now ProShares is providing double-long and double-short ETFs for EUR and USD / JPY and USD pairs. The Forex platforms seem entirely oriented toward day traders to maximize their transaction spreads, a different stroke for a different folk.

Hedging a Weakening Dollar With Currency ETFs

I'd agree the dollar is sinking this year on concerns about economic slowdown and a possible cut in the Fed rate while other central banks are trending up, but would think there is a practical floor. Long term would guess the buck will only decline ver-r-ry slowly, and only if and when the Euro zone develops decent levels of domestic consumption. It's not obvious to me that China or anyplace else in the next 30 years will be able to make the cultural, political and economic transitions to create a consumer alternative to the US - witness even Japan's paralysis right at the point where big changes were needed to create a dynamic economic and political system. Premature moves out of the dollar and failure to underwrite the US consumer would risk killing the goose that is laying the golden eggs for these economies. Talk about global warming: watch the oceans rise from sweat pouring off the foreheads of foreign politicians, business folk and eventually central bankers when the floating Euro pushes $1.40, the A$ or C$ push $0.90, not to mention the obviously manipulated Yen and Yuan rates.

Rydex Euro Currency ETF Fees Seem Reasonable (ETF: FXE)

On my first look into this, it appears to me the relevant comparator would be opening an account with an FX broker and simply buying Euros whenever and holding for however long - as I understand FXE: 1) JPM takes a very hefty MER of 1.65%, apparently because it will be actively moving in and out of the Euro 2) JPM takes the "spread" on each trade, which would be the only "fee" taken by an ordinary FX broker, and 3) to buy FXE units I have to pay my own brokerage its trading fee. I look forward to more on this instrument.