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by Ashraf Laidi
Posted: May 28, 2009 15:40
Comments: 129
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Yield Shoots, Dollar Leaves

Soaring yields give no choice to the Fed but to increase the quantity of bond purchases at the expense of the dollar. Speculative Forex positions agree.
 
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Ashraf Laidi
London, UK
Posts: 0
15 years ago
Jun 5, 2009 21:54
spec, persistent steepness in yield curve to weigh on growth, limit mortgage demand while the excess Fed stimulus will only be inflationary in the real economy once the money in the system makes its way onto households and business which is doubtful at this point. Such historically enormous stimulus explains the 40% rally in equities but unable to turn around the huge engineless tanker --the US economy.

Ashraf
speculator
Posted Anonymously
15 years ago
Jun 5, 2009 20:28
ashraf,

constistently rising longer term yields should imply increasing inflation expectations for the future. if we continue the rising yield curve trend everything else equal, could composite equities indices be a poor longer term investment? what is your view in light of sharp monetrary base injections.

my view is that if the real estate markets dont rise well which be built on growth, confidence, lending and reducing unemployment it is unlikely that the injections will offset global wealth destruction in the real estate sector. real estate does make up the bulk of personal wealth for many countries. so maybe inflation will kick off sharply when real estate is starting to rise. but would the be positive for stocks? obiously would be positive for commodity biased stocks.

thanks
Ashraf Laidi
London, UK
Posts: 0
15 years ago
Jun 5, 2009 19:34
Spec, but we're seeing broad reterat inglobal equities, which is helping dollar stabilize. it's time for Nikkei to take more profits

Ashraf
speculator
Posted Anonymously
15 years ago
Jun 5, 2009 19:08
looking at last 5 days equity index performance in uk and us (ftse 100 and spx), the uk seem to have closed lower. this could possibly have put some short term pesimism over the pound coupled with political factors. could politics have been the main mover of sterling this week? perhaps not.
Ashraf Laidi
London, UK
Posts: 0
15 years ago
Jun 4, 2009 20:38
Spec, Rob: I have been holding SDS since mid May, serving as a hedge too some of my longs in RIMM, JPM, POT. scaled down out of JPM but still holding to some.


Ashraf
Rob
New York, United States
Posts: 305
15 years ago
Jun 4, 2009 19:25
Hey Ashraf,

Same question as speculator - what are your current thoughts on SDS? I saw you got in on EWV, any targets and timeframes on SDS would be appreciated as always. Thanks
speculator
Posted Anonymously
15 years ago
Jun 4, 2009 16:36
ashraf, seen.
still bearish on global stocks or any particular markets?
Ashraf Laidi
London, UK
Posts: 0
15 years ago
Jun 4, 2009 16:18
spec, i was saying eurusd is closest measure of usdx. use that better than cable.
Ashraf
speculator
Posted Anonymously
15 years ago
Jun 4, 2009 15:19
fair enough but how does the most trader pair measure broad dollar strength? its only a relative price between the two most used currencies and excludes emerging market influences etc. would usdx be a fairer gauge?
Ashraf Laidi
London, UK
Posts: 0
15 years ago
Jun 4, 2009 14:56
spec, that was a reply to you, which means eurusd is better rep for USD than cable (which you alluded to to). My book shows EURUSD pair is the most traded currency - about 27% of total traded pairs. and EUR accounts for 58% weight of USD Index, followed by 14% for JPY and 12$% for GBP.

Ashraf
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