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Carry Traders Start Off 2010 With A Whimper

Submitted by Tyler Durden on 01/29/2010 11:33 -0400

Following the crowd, and going long the Brazilian Real while shorting the Yen has had some disastrous results for carry traders: starting off 2010 with a 9.2% loss is never a good thing to show your boss.

(chart courtesy of Macro Man via CreditTrader)

In the mean time the dollar is back to August 2009 levels.

At what point will the carry'ers decide to throw in the towel and actually cover losing positions and book the losses? Look for some serious move in FX markets when that moment finally occurs.

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Fri, 01/29/2010 - 11:54 | 210908 Anonymous

If you look at how the market is trading, it's not really going anywhere. It's actually going down. You can't buy and hold anymore. You have to be in and out. I've been following stocks and I notice there is no conviction to go long.

Fri, 01/29/2010 - 11:56 | 210913 Anonymous

Brazilian big banks are short the dollar and the central bank is the biggest bull and buying almost everyday since 4 months ago.
I'll love to see how that is gonna end if things blow up.

Fri, 01/29/2010 - 11:58 | 210914 Altan311

sooner than you think...

Fri, 01/29/2010 - 13:41 | 211058 Chopshop

bottom bottom ? put a sac of SI on $666 - 681 for me, please.

otherwise we've got a lot of floors left before even cracking $1040.

FTU 2 days back said 1073.60 GC; daily stunt low of 73.2.

if personal internet will stop sketching out might get a quick one up.

min intra-day VIX bounce tgt met as it looks like a baby bull flag riding its 1/55 EMA ... still just fuelling for a long march higher in the larger context.

Fri, 01/29/2010 - 12:15 | 210925 Anonymous

Bin Laden urges abandoning dollar: Al Jazeera tape !!!

http://www.reuters.com/article/idUSTRE60S2YV20100129

guess he knows what he is doing....unlike the financial terrorists !!

Fri, 01/29/2010 - 12:16 | 210926 Anonymous

China and Japan may be another killing field potentially depending on how traders bet on sanctions against alleged undervaluation: http://crisismaven.wordpress.com/2010/01/26/economic-fallacy-i-harmful-c...

Fri, 01/29/2010 - 12:20 | 210931 Anonymous

Actually for today(and taking from TD's observation yesterday),one can trade the EUR/JPY instead of the SPX. I mean they so mimick each other,so why does anybody even bother with trying to buy a single stock,if in the end of the day,it will all depend on some other corelation?

Fri, 01/29/2010 - 12:28 | 210940 Anonymous

But hey,that surely beats printing by the ECB,since the Germans are so adamant on not doing so. But instead,using the Greek fiasco to drive down their currency. However and fundementaly,can anybody tell me why would the dollar go up,despite the persistent trade deficit even in the midst of worse recession?. It fails me,but hey since Jim Rogers changed his position on the ole buck(back in DEC) I would have to take that ot the bank.As that is the only person that I would follow if I am to follow anyboy's word...

Fri, 01/29/2010 - 12:42 | 210964 Anonymous

I always thought that the German lack poltically when it comes to foxy moves. But may be this time they are outmanouvering the FED and the JCB. By insisting that there would be no bailout,they managed to finally drive their Euro down without having to print(like BB),or making money available to at .1% like Japan. So now what?I guess Japan would have to lend GS and pay them interest so they are able to drive their yen down,and BB would have to buy a couple of trillions more in (pick your choice)to throw the ball at the Germans again. In the meanwhile,the fate of the S&P hangs between the EUR/JPY,and the EUR/USD. Isn't there any real local buyers for those shares beside carrytraders(lol)?

Fri, 01/29/2010 - 12:52 | 210977 jm