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Goldman's Bubble Team Scratching Head As Forced To Downgrade AUD Target Of $0.95
It is time for Bloomberg to update its analysis from yesterday on how many billions in dollars Goldman's clients have lost listening to the hedge fund's research call. After earlier apologizing for their EURUSD call, here comes the JBWere guys (the firm's down under subsidiary), saying the time for the downgrade of the AUD is nigh.
From Goldman, which is about a couple of billions dollars in L (not P) behind the curve:
Despite our belief that relative growth and relative interest rates suggest some support for the A$ over coming months, it is hard to see a swift resolution to the major sources of risk aversion impacting Australia and its hard to build a compelling case for offshore investors to bif the A$ higher. In that environment it will be difficult for our long-standing 95c target for the A$ around mid-year to be met; however, we still think our 12 month 90c target is still feasible, albeit with the path to 90 now likely to be via near-term weakness. Whether an ongoing decline in the A$ is in prospect will partly hinge on whether the Treasury Secretary's suggestions that the WACC for the resource sector will be lower are viewed by the market as valid arguments or not. In sum, it is not just risk aversion that is driving the A% lower at present, fundamental factors have also been very important (relative growth, shifting rate expectations, lower commodity prices and capital exit) and the path to lower risk aversion is less dependant on the typical ebb and flow of market sentiment and highly dependant upon the actions of policy markers in Australia and Europe. Our A$ forecasts are now under review.
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Tyler enjoying all this.......just like the movie.
Translation: keep buying AUD while our prop desk shorts it. Since you're sophisticated investors, it's your stupid fault if you think we're acting in good faith.
I could have told the idiots that. Went hard long USDAUD at 0.94 recently, the subsequent capitulation to 0.82 was pretty obvious given that risk was about to explode. AUD = risk love/hate barometer.
At 0.82, it may be worth picking up a small holding now, seems to be some support there. For a little while at least.....
Thinking of starting a second fund, the "Squid Leading Indicator Tactical Slapshot Fund". It will follow GS recs in real time and take the opposite trade on every one of them.
Risk Management Policy: No Blankfein
gold and silver bouncing!!!
I could have told the idiots that. Went hard long USDAUD at 0.94 recently, the subsequent capitulation to 0.82 was pretty obvious given that risk was about to explode. AUD = risk love/hate barometer.
At 0.82, it may be worth picking up a small holding now, seems to be some support there. For a little while at least.....
After earlier apologizing for their EURUSD call, here comes the JBWere guys...
Right on cue. Those GS squids are placing bets too see how long their retail clients will keep taking the other side of their prop-desks' trades. They are laughing at how stupid we are...
I was wondering when someone would mention the fact that the Aussie, a favorite among the reflationists, had fallen off a cliff. Along with Palladium and Platinum.
Australian central bank (RBA) makes huge money every year from trading the AUD. If/when you see the RBA step in, you know it's time to close or reverse your position.
Shame they are terrible at timing their interest rate moves. I still believe the real estate crash-to-come in Australia is going to be absolutely spectacular...epic in fact.
Did I read that Sydney has the most imbalanced cost per sqM per mean income relationship in the world?? (As in highest cost / income)
If not the most imbalanced, definitely Top 5. But probably, yeah. It is a disgustingly expensive place to live.....for now! I live far better in Manhattan for less.
If Goldman recommends that Aussie will collapse it will probably rally. Goldman double-speak...
EURUSD buying support is still evident.
Updates:
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
This investment advice is absolutely worthless. I would be less confused if I didn't even read it. Can't believe they still have clients after this dribble, they are just covering all bases.
I'm confused, and maybe you all can help me, but wasn't the AUD strong because Australia wasn't exposed to the mortgage crisis? I am not sure how/when that info floated into my head, but if anyone can point me in the right direction I'd appreciate it.
I believe the weakness to be a result on their heavy dependancy on China's economy.
They can't export enough boomerangs to China to pay the bills?
http://www.innovation.gov.au/section/aboutdiisr/factsheets/pages/australia'sexportsfactsheet.aspx
Boomerangs yes, but the kangaroos are the problem.
But Intel sold 8.5 billion dollars worth of chips to asia in just 3 short months. That is if they weren't LYING OUT THEIR ASS.
They're selling chips out the ass!
Its a commodity based currency, so weakness in the metals market leads to weakness in the Aussie. There's a lot of other reasons too, I just don't fully understand them.
Some more selling after the downgrade and it will be time to buy.
Either...
A) they placed the retards @ the currency desk and the geniuses @ the Equity & fixed income desks
or
B) Goldman can't fuck with a multi-trillion market. They tried, but got kicked in the balls.
For several days I have been warning of EURUSD buying support as detected by my indicators, and this has been confirmed by the recent break out.
The proprietary indicators I use can identify trend changes before they occur.
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
One has to wonder about the influence of GS on Australian politics, I'm guessing they were big supporters of the clowns that proposed a 40% tax increase on miners (and their investors) which would predictibly restrain their economy, crush foreign investment, and drive their currency down in value.