Tuesday, 9 August 2011

Look At The Bright Side

On the weekend I wrote:

Positions: I rarely go into a weekend with open FX positions but this weekend I am short AUDJPY, GBPJPY, EURCHF and Suncorp (what a lemon) all deep in the money, I have no bullish positions at the moment but am trying to find a good entry to long a Gold contract.

In June I wrote a post called Special Relationships, and that 'special' relationship was never truer in the equity bloodbath over the last two days. And what about Suncorp? Into the abyss.

I've  been whistling a little Nat King Cole tune:

“Red sails in the sunset, way out on the sea.
Oh, carry the bull’s money...home safely to me
She sailed at the dawning, all day its been poo.
Red sails in the sunset, I’m trusting in you.”
(apologies to the memory of Nat King Cole)

NB. The thing to watch in this trade, is Bank Of Japan currency interventions, they always fail, but every few days tighten your stops take the profit and short again after the intervention as it rolls off the top.

I also wrote on Super Assets:

So in 4 years, Cash is ahead of inflation by 6.5%, ahead of High Growth by 38%. High Growth is 31.5% behind the inflation curve.......
  • When you lose 15% off your Super (approx 25year to go) thats an extra year or two you have to work to make that back (a loss of a single 15% this year equates to a payout of about $60,000 less in 20 years and $80,000 less in 25 years).
The bright sides? These folk in "high growth" are going to be remaining the workforce for years so their goes the so called "skills shortages".

Also, the Baby Boomers getting their super smashed will be dumping their investment properties very soon methinks, so maybe some "Irish Discounting" (-50% over 4 years) to get that retirement property in 2014/2015?

10 year returns since 2001:
Equities (high growth): +18.6% (a princely average annual return of 1.7%)
Gold (in AUD): +216%
Cash: +79% (annual 6% assumed)

I quoted on Gold...

A simple correlation rule of thumb allows us to predict that gold will be at $1,950 by the end of the year if it simply retains it close correlation to the debt ceiling. Should Bernanke announce that he will additionally need to monetize some or all of this incremental debt amount, we anticipate that gold will be well over $2,000 by the end of the year, courtesy of yet another round of accelerated dollar debasement

At +$120 in two days it might get there in a month!

European Kleptocracy.

The ECB spent a gazillion and bought Spanish and Italian bonds and boom went the market (for 55 minutes).

That Bond buy (ECB slurping Spanish and Italian slop) was a travesty. All it did was mega boost Spanish and Italian banks (temporarily). Lending money as a last resort to severly indebted entities to boost bank balance sheets. The ECB should change its name to Banking Bastards Cabal LLC Inc.

Why? A couple of banks are fucked.
ECB's new policy statement:

“We’ll continue to look after our banking masters, socializing their losses until we have exhausted all capital (and YOU are rooted, bankrupt and our bonds are rated CC-) and we’ll reduce your personal freedoms even more in the process”

Time for some levity.

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