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Credit Agricole: Sell Everything If The Dollar Keeps Rallying
From Credit Agricole
For those of you who have seen my presentation on markets in the last couple of months you will have seen the following chart (chart 1). Its shows various popular assets (Bovespa, AUD, Gold) vs. my global liquidity model in green, which is designed to measure changes in the $ pool of global liquidity aka the cash we have to invest in those assets. Essentially, I believe it shows how assets markets have become junkies dependent, on a forever falling $ and an ever increasing pool of liquidity. To illustrate the point you can see that in March 2008 the model rolled, within 2 months the Bovespa followed and a month after that the AUD. On the rebound the model turned at the end of October and gold, which actually peaked earlier on the way down followed tick for tick. The Bovespa once again was a laggard turning the following month and the AUD finally followed 4 months after the initial turn.
So now if you look at the second chart, which is a daily version of the bigger chart you can see that since the central banks stepped in to provide liquidity in November 2008 the correlations between the liquidity model and global assets has got absurdly tight. You can also see that since global liquidity topped at the beginning of December it's essentially gone nowhere explaining why assets have lost momentum and people have had a hard time making money.
But with the $ rally starting to broaden i.e. to the AUD and CAD and the Fed discussing asset sales (I've written extensively about how I believe the Feds balance sheet = the $ supply) owners of risk assets need to be EXTREMELY CAREFUL. $ rallies are truly toxic. Don't forget that during the last one 1995-2000 we blew up Asia in 97-00 and stocks in 2000!
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European bazooka at work.
http://worlddarkestdays.blogspot.com/
What's plan#12?
"There is no out, there is only in"
Trichet should be hung.
He single handedly caused the greatest major currency rout in history with his "brutal" and "unwelcome" statements.
Au contraire, Mr. Trader, sir.
What we have here is the deliberate massage of major currencies through the Federal Reserve Board.
Remember the half-trillion dollars that went overseas to prevent the meltdown of all things denominated in US Dollars? Well, those FX swaps came at a price in that the Fed calls the tune.
By rotating through currency strength and weakness, the USD Index (DXY...) has been able to maintain a tight range around 80 throughout this whole crisis. There is no other way to explain that except through orchestration.
Hang Trichet? Sure. I don't care. Let's just do it for the right reasons, realising that he is just following orders.
plus 1 zettabyte*, Orly. Smart thought you!
* 1 zettabyte = one million petabytes
http://www.telegraph.co.uk/technology/news/7675214/Zettabytes-overtake-p...
We'll know by watching the POG. If its currency-weighted price stays aloft, then what you are saying is correct, and is what I have suspected for some time now.
Right on
While Merkel is busy making bad deals, let's trade her Obama, for two Hamberg strippers and a fourth round draft choice. Never waste a crisis (Junkyard Rahm).
Patrick Henry, 9 June 1788:
After all your reforms in government, unless you consult the genius of its inhabitants, you will never succeed; your system can have no duration. Let me appeal to the candor of the committee, if the want of money be not the source of all our misfortunes. We cannot be blamed for not making dollars. This want of money cannot be supplied by changes in government. The only possible remedy, as I have before asserted, is industry, aided by economy. Compare the genius of the people with the government of this country. Let me remark, that it stood the severest conflict, during the war, to which ever human virtue has been called. I call upon every gentleman here to declare, whether the king of England had any subjects so attached to his family and government, so loyal, as we were? But the genius of Virginia called on us for liberty — called us from those beloved endearments, which, from long habits, we were taught to love and revere. We entertained, from our earliest infancy, the most sincere regard and reverence for the mother country. Our partiality extended to a predilection for her customs, habits, manners, and laws. Thus inclined, when the deprivation of our liberty was attempted, what did we do? What did the genius of Virginia tell us? Sell all, and purchase liberty! — This was a severe conflict. Republican maxims were then esteemed. Those maxims, and the genius of Virginia, landed you safe on the shore of freedom.
That Virginia story crap reminded me of Northfolk, Lord Dunmore, the black Loyalists who heard the call of freedom scrap...
Dealing in reality is that good.
This is a great chance for our Idiot President Obama
to get on TV and tell more jokes... like his hero
Jay Leno..
King dollar is here to stay! It WILL not collapse!
Look at the huge dollar rally despite a historic episode of printing/QE.
Bernanke was asleep at the wheel before, but now he is doing the right thing!
They have saved us from another Great Depression and the economy is now recovering. DO NOT AUDIT the FED. WE can keep the economy growing if we can keep them a secret!
Do not tell me that the truth "Always comes out". Nonsense! What about the Kennedy assignation? What about 9/11? what about Obama's transcipts and birth certificate?
Well... given that an increasingly-valuable dollar is DEFLATIONARY, it's a bit hard to make the claim that we've been "saved from a depression"...
Someone assigned Kennedy?
Cash flow don't like. M3 collapsing. There is simply no money to keep all the rents aloft.
The US Government needs to quickly figure out how to slash spending in HALF - and THEN IN HALF AGAIN.
If they can't do it, the future belongs to those who psychologically embraced Mad Max 5 years ago and are truly prepared. Denninger - as an example - is warning people to flee the Hamptons.
Has it really come to this? Revolution and martial law??
The Federal government slashes budget in half and you will probably be in Mad Max in about a month.
Douchinger is a paperbull.
The government will not slash spending by 75%. They will print more dollars; this is always the course.
Scott's Miracle Grow downgraded!
My focal US market indicator of the joke rally of 09-10 WAS DOWNGRADED this morning at 8:59 AM by Jeffries.
Without Miracle Grow, this market is toast! Sell. Get your crash helmet.
I am sure Big Ben will find an extra trillion of USD lying around somewhere.
Moodys should DownGrade the US Dollar..
The IMF has already called for it, last week.
I reckon the nice folks at Moody's would find either a small tactical nuke delivered to their front door, or the entire exec staff spirited away to Gitmo about 0.000002 seconds after they tried to downgrade King Dollah.
Sell everything....except gold and silver bullion coins.
To Whom?...
Yeah, like you I agree,meanwhile Nadler is gloating again....sheeeeeesh.
I do not believe I have ever seen anyone in any business, talk trash about his mkts products.
He takes blurbs from news sources, and use's them to make his point when they come to pass....LOL
Funny.
Personally I am with Chumbawba.............
You keep your fiat shit, and make .025% on it...I will take the up's and downs on the PM's.
Knowing it's just a matter of time before payday hits.
+ spekulatn's and Orly's zettabyte, Mr. Lennon!
The impending USD rally I've warned about since 2009 has arrived. It may last for some time too ...
MARKET UPDATES:
http://www.zerohedge.com/forum/latest-market-outlook-0
Yes sir, we knew you were correctomundo.............I am sure your correct, once the contagion spreads, it will be a real smackdown in Europa.
Too bad, their worlds stuck w/ the least WORST currency.
Hey - thanks for the TA, but howaboutcha post something relevant to the thread?
Do you really have to post in every stinkin' thread? The same thing?