Why will the dollar rally?

[NickNick]

How much higher do you think it will go?? 2.089 [img]/images/graemlins/confused.gif[/img]

[DcifrThs]

[ QUOTE ]
How much higher do you think it will go?? 2.089 [img]/images/graemlins/confused.gif[/img]

[/ QUOTE ]

this is a very attractive short. i'd be long the USD/GBP now by about 40% of the max position.

if it moves north of 2.095 i'd build up to 50-60%

if it continues higher than 2.11 i'd push up further but i'd thing in the next 2 years the fair price of the USD/GBP would be in the 1.75-1.95 range based on interest rate/growth diffs and CA/KA considerations in addition to relative investments in securities.

Barron

[The once and future king]

[ QUOTE ]
wtf... there has been so much good news.. this recession [censored] is gonna be a self-fulfilling prophecy. Even the real disposable income numbers were really, really good. As soon as I free up the cash from my mutual fund I'm jumping into AMD, DELL, and maybe a retail ETF (which has been getting hammered all year).

[/ QUOTE ]

The bad news trumps the good news. Also the bad news is longer term.

[gonebroke2]

[ QUOTE ]
[ QUOTE ]
wtf... there has been so much good news.. this recession [censored] is gonna be a self-fulfilling prophecy. Even the real disposable income numbers were really, really good. As soon as I free up the cash from my mutual fund I'm jumping into AMD, DELL, and maybe a retail ETF (which has been getting hammered all year).

[/ QUOTE ]

The bad news trumps the good news. Also the bad news is longer term.

[/ QUOTE ]

what good news? 2/3 of americans already believe we are in a recession. the dollar has fallen off a cliff. oil is at all time highs and commodities are going bonkers. the housing market is in the 2nd or 3rd inning of the downswing. and most importantly, the over the counter derivatives that these financial institutions are hiding from investors are going to implode in their faces very soon. the financials are going to have 0 or negative earnings for the next several quarters. i believe they are going much lower and a handful will go bust or get bailed out. look what happened to the bond insurers of the CDOs (toxic waste):
http://finance.yahoo.com/q/bc?s=MBI&...;q=l&c=abk

the financials are infested with this toxic waste; not just domestically but internationally too. who knows when the next time bomb will explode.

[Moonshine]

[ QUOTE ]
[ QUOTE ]
If jobs come in at closer to 100K than 85K the market should rally and I suspect the dollar will as well.


[/ QUOTE ]

That may have been the shortest rally in market history. [img]/images/graemlins/smile.gif[/img]

Jimbo

[/ QUOTE ]

haha nice call on that one Jimbo

go CAD!

[Moonshine]

[ QUOTE ]
[ QUOTE ]
Post your thoughts. I've been short the dollar since mid summer and I want to lever up. Someone tell me why this could potentially be a bad idea, I want to see if I'm missing anything.

[/ QUOTE ]

Rate cuts are now less expected. Therefore the dollar, which had started to price in many rate cuts, may start to rally.

[/ QUOTE ]

inflation concerns should be bearish for the dollar though...I would expect this to not be a big factor

[Jimbo]

[ QUOTE ]
2/3 of americans already believe we are in a recession.

[/ QUOTE ]

This alone is good evidence that we are not.

[ QUOTE ]
the financials are going to have 0 or negative earnings for the next several quarters. i believe they are going much lower and a handful will go bust or get bailed out.

[/ QUOTE ]

If you had been more specific on what you meant by the broad term "financials" I could easily refute your contention. In general it is unlikely any of them will "go bust" and earnings will continue though perhaps at a slower rate than in the past. Don't confuse earnings with loss in Cap Value.

Jimbo

[gonebroke2]

[ QUOTE ]


[ QUOTE ]
the financials are going to have 0 or negative earnings for the next several quarters. i believe they are going much lower and a handful will go bust or get bailed out.

[/ QUOTE ]

If you had been more specific on what you meant by the broad term "financials" I could easily refute your contention. In general it is unlikely any of them will "go bust" and earnings will continue though perhaps at a slower rate than in the past. Don't confuse earnings with loss in Cap Value.

Jimbo

[/ QUOTE ]

I am referring to any company involved with or having exposure to over the counter derivatives. That includes the main brokerages like goldman, lehman, merril, and tons of other institutions. I am not confusing loss of market cap with earnings. These stocks are going to be posting major earnings losses for the next several quarters and they are going to get slaughtered. Most already have been. They were involved in a big ponzi scheme with the foundation of it being based on suprime paper. Now that the foundation is starting to fall apart, the pyramid ponzi scheme is going to crumble. Only thing keeping them afloat now is major liquidity injections coupled with a devaluation of the dollar.

[Orlando Salazar]

[ QUOTE ]
[ QUOTE ]
2/3 of americans already believe we are in a recession.

[/ QUOTE ]

This alone is good evidence that most americans have no idea how a recession is defined.


[/ QUOTE ]
FYP

[DcifrThs]

[ QUOTE ]
[ QUOTE ]


[ QUOTE ]
the financials are going to have 0 or negative earnings for the next several quarters. i believe they are going much lower and a handful will go bust or get bailed out.

[/ QUOTE ]

If you had been more specific on what you meant by the broad term "financials" I could easily refute your contention. In general it is unlikely any of them will "go bust" and earnings will continue though perhaps at a slower rate than in the past. Don't confuse earnings with loss in Cap Value.

Jimbo

[/ QUOTE ]

I am referring to any company involved with or having exposure to over the counter derivatives. That includes the main brokerages like goldman, lehman, merril, and tons of other institutions. I am not confusing loss of market cap with earnings. These stocks are going to be posting major earnings losses for the next several quarters and they are going to get slaughtered. Most already have been. They were involved in a big ponzi scheme with the foundation of it being based on suprime paper. Now that the foundation is starting to fall apart, the pyramid ponzi scheme is going to crumble. Only thing keeping them afloat now is major liquidity injections coupled with a devaluation of the dollar.

[/ QUOTE ]

lol, riiiiiiiiiiiight...the only thing keeping f*cking goldman sachs afloat is liquidity injections and a devaluation of the dollar.

it couldn't be that even if every single dollar goldman has invested in subprime paper off and on balance sheet were worth absolutely nothing, goldman would still be an extremely valueable company. their earnings were solid, but suspect. even if the suspect part (8bil trading profits w/ 2.5bil coming from inhouse pricing models of illiquid "level III" assets) was worth nothing they'd still have 5.5bil in profits. they were also smart enough to big time short mortgage backed assets and made a ton there. so point is that goldman is not a bank standing on a shaky cliff.

one thing i've noticed is that CDS markets seem to very strongly overreact and if i could find a way to go long a CDS index on 1 company (namely goldman) i'd think that it could be a profitable trade. i'd want to build a position though as the cost of insurance against goldman debt might rise as the extent of their exposure increases (they and mnay other banks might be practicing accounting tricks to get the total amount spread over a few quarters...though it may be more attractive to get it over with in one fell swooop...who knows what they'll choose to do)

either way, i don't think your absolute statements of how goldman et.al. are involved in a ponzi scheme (lol) are anywhere near correct.

and i'll put my money where my mouth is.

i'll offer you even money that goldman does not post any negative earnings in the next 3 quarters. to rephrase, goldman will post a positive profit for the next 3 (or 4 whatever you want) quarters. you can name your price.

Barron