Long Trades Sink – Kong Waits On Private Island

If you’ve heard me say it once – I’ve said it a million times. A strong U.S Dollar will not be tolerated, as it represents a “red-hot poker to the eye” of both the corporate American “and” The U.S Fed.

You can fire up with all the fancy economic bullshit you can rustle from the countless “pro risk/pro USD/pro economic recovery loser blogs” out there ( and I hope you do ) and it won’t make a stitch of difference.

This thing will be cut off at the knees as U.S earnings plummet to the depth of an ocean.

Lets just call it the “Sea of Recession”.

You’ve heard of it but have no f*^*king clue where it is…..perhaps try looking in your backyard.

Short USD trades are once again “up and running” as we prepare to snap up all those long trades – soon going overboard.

I’d take a look at U.S Equities as well and consider that when BOTH the U.S Dollar AND Stocks start dropping like a rock….the big boys will have already taken the life rafts to shore.

I’ll already be on my private island – scanning my beaches for washed up traders and radio shack suits.

Do you think New Yorker’s can even swim?

I doubt it.

1 Response

  1. madness April 7, 2015 / 4:05 am

    Hi Kong,

    Earning misses as a result of a strong US$ won’t make a difference. As long as US does not raise rates (it can’t without risking a further appreciation of the US$), companies will borrow at zero rates and continue to buy back their own stocks, It doesn’t matter that companies have increased debt at the expense of keeping their share price elevated. As long as the Board of Directors can hold up the stock price so their bonuses and options keep increasing in value, this is all that matters. Investors will not complain (as their stock prices are rising) until the day the companies can no longer meet their liabilities and file for bankruptcy. Only then will the fiasco of stock buy backs as the expense of debts will come to light (don’t expect any prosecutions due to inept management).

    Any further fall in US macro figures, especially anything that suggests recession, the FED will suggest QE4 or a variance of such. When they do this, this is when US$ will weaken. Until then, can’t see a material fall in US$.

    If we take a look at individual major currencies:
    GBP will likely be affected by expectations of another hung parliament.
    JPY just can’t fall below $/Yen 118.00. Many in Japan calling for even more QE due to bad data.
    EUR – Can’t stay above Eur/$1.10 with any conviction. EU QE at present is working.

    Commodity: AUD, NZD, CAD. If macro data keeps falling, commodity prices will keep falling which will limit ability to rise. In fact, am surprised CAD has held up so well considering how much oil fell and how bad Canadian macro data has been.

    We are already in to the forth month of this year and there has not been any indication of the markets looking to price in any risk off.

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