Goodbye carry trade?

[dageshi]

While the rate differential is certainly a powerful force there are a couple of things to bear in mind. The carry trade itself was used to fund lots of lots of purchases by our good friends the hedge funds, those same hedge funds are being gutted at the moment due to investors redeeming their cash, this is a process that is likely to take another couple of months to play out, when you have no choice but to sell your investments in order to raise cash it doesn't really matter how appealing the differential is, everything must and will go.

This is relatively short term though what would be more important is if the Fed cuts rates, if it does then the whole bias changes, even though a 25 or 50 bp cut would still leave a large differential between the Yen and dollar the expectation will be for that rate to continue to narrow, even if the Japanese cut rates it's only slowing down that narrowing, again not ideal conditions for a carry trade.

The carry trades in EUR and GBP are more difficult to call, but there have been some very large appreciations in both and I have to wonder if we're not due some serious strength from the Yen.

All of this leads us to the exciting prospect of the BoJ intervention, they threatened it recently and I fully believe they'll do it at some point when the pain becomes too much for them.

 

[grantx]

Dageshi,

Re USD/JPY carry-trades. A fund which took long dollar/short yen to invest (in US CDO’s, for example) could be hit on three sides – falling dollar, lower US rate, stocks hit the rails.

I’m out of my depth on this one but would the effects be further compounded for domestic German fund, for example, ie selling Euro (against what?) , buying Yen, selling dollar?

I think rate differentials will become an irrelevance, regardless of further cuts. The biggest risk (to stock markets) is a weakening dollar and uncertainty surrounding the full extent of exposure to SIV’s/CDO’s. Again, this may be compounded by a possible repatriation of domestically held foreign funds, especially by the Japanese, leading to “serious strength from the Yen”.

In the final analysis, successful carry-trades depends on potential positive returns. Where?

Grant.

 

[dageshi]

Actually I think the biggest threat to stockmarkets worldwide is a strengthening dollar. That implies deflation and a rush to "safe haven" afterall the Americans have been investing overseas in Europe and Asia for a long time there is an awful lot of American cash in strange places around the world and if things start to look bad in the US that money could come winging its way back, shock horror that could make the dollar strengthen despite everything.

As to how euro funds have funded their particular endevours it's difficult to say, there are quite a few options, the gbp and dollar stand out because they have the large differential, I wouldn't be at all surprised if a lot of london based hedgies have financed out of the GBP/JPY.

Another favourite has been the swiss frank. In the end anything that has been a carry trade in the past is now highly suspect because at the end of the day the carry trades only work in a lowish volatility situation, when you have organisations that must liquidate at any costs interest rates mean nothing, infact they will likely be the first to go because they are the most profitable.

As for the start of the week, don't know if anyone noticed but the dollar index closed under 80 by a smidgin. To actually close under 80 on the weekly chart is not a good omen for the dollar likely as not traders are already discounting at least a 25bp cut from the fed.

 

[grantx]

Dageshi,

Two sides to every coin – there’s three or four here.

Can’t argue against your strengthening dollar case. An article in the FT yesterday suggested that as US property owners become stretched they’ll save more to offset increased costs, ie less spending on imports which should reduce the trade deficit. While this may appear desirable, the strengthening dollar will make exports more expensive thus fewer sales/reduced demand for US exports, fewer jobs, work insecurity. Not a good backdrop for a stockmarket. And if the US is down at heel, as a net importer the world economies will also suffer.

Didn’t consider GBP/JPY.

Re organisation forced to liquidate, apparently funds are already being established to buy what could be termed “distressed debt”. Talk about ambulance chasing. I wonder if these will be funded by carry-trades?

What next? How about persistent institutionalised, government sanctioned overstatement of accounts for Chinese companies? Tsing Tao's all round.

Life is never dull.

Grant.

 

[Atilla]

When discussing all this weakness and strength and solutions and drawbacks we really need to map out a time frame. Are we talking in the short term or long term?

We have had dramatic declines in the dollar and budget defecits are still with us.

There is intrinsic weakness in the US economy. No amount of fluctuations in rates or dollar value will resolve these issues wrt competitiveness and rising global economies. Exchange rates can resolve short term BoP problems but not fundamental long term ones as US is experiencing.

It's precisely this kind of short termism that has led us to where we are today. To prescribe the same medicine again is pure folly.

We now have a slowing down economy with inflationary pressures. Stagflation!

The recent growth of US companies and indeces is largely based on creative accounting (bent financial practices) and falling dollar stimulated by far too much liquidity, low rates and war funding. Look at the sub-prime market. What's new since Enron. Cisco and Boing still practice dodgy accounting. All the **** out there brewing in a couldron and they are trying to keep a lid on it. How daft is that? I'm no accountant but I'm not stupid either.

In the short term - lower rates and higher taxes.

Long term - higher rates and higher taxes to get productivity and competitiveness going.

No effing two ways about it. Balance the budget and balance the BoP first. Stuff rate drops, raise taxes and stop the fall in the dollar.

Start by getting rid of Bush the anti-American. Never have any nation who deserved more at such a critical time received so much less in the history of the United States.

 

[Rhody Trader]

In the short term - lower rates and higher taxes.

What do you see this as accomplishing? It's basically an offsetting proposition. Lower rates get cancelled out by the decreasing money supply (taxes effectively withdraw reserves from the system).

Long term - higher rates and higher taxes to get productivity and competitiveness going.

How does this increase productivity and competitiveness? Higher taxes aren't exactly an incentive.

No effing two ways about it. Balance the budget and balance the BoP first. Stuff rate drops, raise taxes and stop the fall in the dollar.

Why does balancing the budget have to mean increaseing taxes? Why can't it mean cutting expenses?

 

[Atilla]

What do you see this as accomplishing? It's basically an offsetting proposition. Lower rates get cancelled out by the decreasing money supply (taxes effectively withdraw reserves from the system).

Lower rates help industry to produce more and become competitive.

Higher taxes reduces demand for goods.

Lower rates in the short run will help stabilise the sub-prime crises also.

With continued strong world demand will help with exports and at the same time reduced demand for imports coupled with low dollar will make imports less competitive and so addressing the BoP defecit.



How does this increase productivity and competitiveness? Higher taxes aren't exactly an incentive.

Lower taxes are an incentive to buy more imports. The rich spend their money on imports. Lower taxes does not improve productivity. That's old hat theory. Higher taxes make leisure cheaper so people don't work... Investment and invention improves productivity by a greater %

Why does balancing the budget have to mean increaseing taxes? Why can't it mean cutting expenses?

You need to reduce government expenditure and raise revenue. If you are suggesting increased employment will lead to increase taxation revenue for government coffers than you would be misled imho. Bush has already precisely done this by lowering taxes. Clinton's admin did a lot to reduce defecits. Now all undone by Bush admin.

Cut expenses not a possibility. US already facing a medical and pension crises not to mention bridges and flood protection and war budgets...

Don't you think the Bush administration should tax oil companies instead of giving them more tax breaks?


9/11 Fahrenheit is on TV tonight at 9pm. Well worth the watch.


How has the Bush administration financed the $700bn war in Iraq?

 

[Rhody Trader]

Lower rates help industry to produce more and become competitive.

Higher taxes reduces demand for goods.

Lower rates in the short run will help stabilise the sub-prime crises also.

With continued strong world demand will help with exports and at the same time reduced demand for imports coupled with low dollar will make imports less competitive and so addressing the BoP defecit.

All that's fine, if somewhat argueable in terms of the sub-prime part.

Lower taxes are an incentive to buy more imports. The rich spend their money on imports.

What!!!??? Have you looked at where a great many of the products we non-rich folks buy originate? They're imports. Inflation in this country would be much higher were it not for cheap goods from China, et al.

Lower taxes does not improve productivity. That's old hat theory. Higher taxes make leisure cheaper so people don't work... Investment and invention improves productivity by a greater %

How, exactly, do higher taxes make leisure cheaper? By making work more expensive? What about the part where higher taxes reduce disposable income, thereby reducing the amount of capital avaiable for investment?

If you are suggesting increased employment will lead to increase taxation revenue for government coffers than you would be misled imho. Bush has already precisely done this by lowering taxes. Clinton's admin did a lot to reduce defecits. Now all undone by Bush admin.

I wasn't suggesting anything to do with employment. That said, you do realize that the deficit has been coming down for quite some time now, right? I can't imagine spending has decreased, so that can all be attributed to increased tax revenue.

Cut expenses not a possibility.

Ha! There's plenty of pork in government spending that could be eliminated.

Don't you think the Bush administration should tax oil companies instead of giving them more tax breaks?

Tell me what tax breaks they get which others do not.

As for taxing them more than the standard tax rates applicable, no, I am not for that. Why should they be treated any differently than any other company?

How has the Bush administration financed the $700bn war in Iraq?

The exact same way every administration had financed every expenditure - by writing a check and then collecting taxes. What does that have to do with this discussion?

 

[Atilla]

All that's fine, if somewhat argueable in terms of the sub-prime part.



What!!!??? Have you looked at where a great many of the products we non-rich folks buy originate? They're imports. Inflation in this country would be much higher were it not for cheap goods from China, et al.

You need to focus on the big cheese not the little cheese.

How, exactly, do higher taxes make leisure cheaper? By making work more expensive? What about the part where higher taxes reduce disposable income, thereby reducing the amount of capital avaiable for investment?

Work or Leisure. They are substitutes for each other. The idea behind taxation is to curtail demand. Defecits are not reducing. They are at 7% +. It is pure folly to believe simply controlling monetary supply you can control the economy. There is stagflation imho and soon will be acknowledged. In fact people are talking about a grinding economy (recession) whilst the excess liquidity and inflationary pressures. You need to raise taxation to curtail demand...


I wasn't suggesting anything to do with employment. That said, you do realize that the deficit has been coming down for quite some time now, right? I can't imagine spending has decreased, so that can all be attributed to increased tax revenue.

Not sure where you get your stats from. Since dollar has fallen dramatically there has been a small improvement in BoP but nominal. However, without corresponding structural changes this will be temporary until requiring further falls in the dollar.



Ha! There's plenty of pork in government spending that could be eliminated. Yeah sack Bush and his administration for starters.



Tell me what tax breaks they get which others do not. You kidding me right? They get tax breaks on top of all their profits so they can dig up and explore new wells. Bush recently wanted to veto Senate bill for $10 or $20bn investment to R&D alternative sources of fuel.

As for taxing them more than the standard tax rates applicable, no, I am not for that. Why should they be treated any differently than any other company?

Because you are supposed to use taxation to control and guide the economy.

Are you for proportional or flat taxation? Are you for agressive or regressive taxation? Don't you think if equal people pay equal taxes that unequal people should pay unequal taxes including companies?

Lot's of different view points.


The exact same way every administration had financed every expenditure - by writing a check and then collecting taxes. What does that have to do with this discussion?

You say the budget defecit is shrinking whilst the government is printing money = inflation? Falling dollar. Wars have to be financed. Where is the money coming from? Government surpluses.

Why cut public expenditure to finance some sick twisted war that's damaging corporate US sales?

 

[Rhody Trader]

You need to focus on the big cheese not the little cheese.

Since US companies are the ones spending money on imports, not US citizens, I think the cheese is well distributed. If the little people don't demand the products, the companies don't import.

Work or Leisure. They are substitutes for each other. The idea behind taxation is to curtail demand. Defecits are not reducing. They are at 7% +. It is pure folly to believe simply controlling monetary supply you can control the economy. There is stagflation imho and soon will be acknowledged. In fact people are talking about a grinding economy (recession) whilst the excess liquidity and inflationary pressures. You need to raise taxation to curtail demand...

Work and leisure may be time substitutes for each other, but they are not fiscal substitutes. One leads to income, one generally means expense. And taxation's first reason for existance has nothing to do with demand. It's about financing the government, specifically to fund those social necessities (like defense) which would not be properly provided for by normal activities.

You're not the first to bring up stagflation as a prospect. Maybe you're right. That would indeed by like a grinding economy, but you incorrectly equate that to the term "recession". Recession is a techincal term for two consecutive quarters of negative GDP growth.

As for needing to raise taxes to curtail demand, that's only one possible tool. Anything which reduces the amount of money people have to spend and/or increase the price of what they would purchase will serve.

Not sure where you get your stats from. Since dollar has fallen dramatically there has been a small improvement in BoP but nominal. However, without corresponding structural changes this will be temporary until requiring further falls in the dollar.

I was referring to the budget deficit. At no point in this discussion have I spoken in regards to the BoP.

You kidding me right? They get tax breaks on top of all their profits so they can dig up and explore new wells. Bush recently wanted to veto Senate bill for $10 or $20bn investment to R&D alternative sources of fuel.

Again, tell me what tax breaks they receive that other companies do not. There are loads of tax breaks being handed out to all kinds of companies in all areas. One could quite reasonably argue that those breaks incentivizing the oil companies to do more exploration are a good thing right now to bring more supply online. Not that I wouldn't mind seeing us do something about alternative sources.

Because you are supposed to use taxation to control and guide the economy.

No. You are supposed to use a combination of fiscal (taxes and spending) and monetary policy.

Are you for proportional or flat taxation? Are you for agressive or regressive taxation?

I think by "aggressive" you mean "progressive".

As for my own leanings, I would tend to favor a flat tax structure.

Don't you think if equal people pay equal taxes that unequal people should pay unequal taxes including companies?

Define "unequal".

You say the budget defecit is shrinking whilst the government is printing money = inflation? Falling dollar. Wars have to be financed. Where is the money coming from? Government surpluses.

If by "Government surpluses" you mean deficit spending, then you're absolutely correct. And don't we have a bit of an issue with inflation? The Fed seems to think so, especially if you believe the statistics are understated.

Why cut public expenditure to finance some sick twisted war that's damaging corporate US sales?

Damaging corporate US sales? You're kidding, right? War is perhaps mankind's most profitable venture. All that government spending is going somewhere. Can you say Haliburton?

 

[dageshi]

Don't you think the Bush administration should tax oil companies instead of giving them more tax breaks?


9/11 Fahrenheit is on TV tonight at 9pm. Well worth the watch.


How has the Bush administration financed the $700bn war in Iraq?

Not to disillusion you but you know the US government makes more out of taxes than the oil companies do for actually pumping the oil? As the price of oil rises the governments taxes increase but they don't have to worry about how inflation might affect the cost of production that's the oil companies problem. Likewise you hear congressmen and whiney democrats wailing about the obscene price of oil and how the oil companies are making a fortune when the government is making absurd amounts of money in taxes off the oil companies, I don't remember them ever suggesting they should cut back taxes in order to lower the price at the pump eh?

 

[TWI]

How has the Bush administration financed the $700bn war in Iraq?

There will be an increasing division between masters and serfs. Which side of the divide do you want to be on? Bush et al wish to destroy the middle class and ultimately this is who will pay for these excesses. The US is a printing press, just have a look at money supply growth.The only reason the US can do this is because they are still the reserve currencey but they are losing out in influence and credibility globally. Fact is, the big loser will ulimately be Mr & Mrs middle class who will probably eventually get tasered anyway for speaking out too late and once the Halliburton factory prison is built and happy to take them in for some hard labour. New World Order is upon us and you better ensure you are on the right side of the road.

 

[Rhody Trader]

Bush et al wish to destroy the middle class ...

I don't think you can put it that way. It might be that the "ruling class" is seeking to create further power and wealth for itself, but I very seriously doubt there is a conscious effort to eliminate the middle class. That would be the height of folly. The middle class is the buffer between the rich and the poor. With no middle class to protect them, the rich will eventually get taken down by the dissaffected poor.

The US is a printing press, just have a look at money supply growth.The only reason the US can do this is because they are still the reserve currencey but they are losing out in influence and credibility globally.

I'm not an economist and don't have a real basis for comparisson, but M2 has grown 30% in the last 5 years. That's about 5.4% compounded over that span (M1 is about half that rate). I don't know what nominal GDP growth has been over that same timeframe, but I don't think it's so far off as to suggest that US money supply growth has been excessive.

 

[Atilla]

Since US companies are the ones spending money on imports, not US citizens, I think the cheese is well distributed. If the little people don't demand the products, the companies don't import.

The cheese between the rich and poor is not well distributed. Ask the poor *******s at the far end of no medical cover, no pension and no work and for some no limbs with little or no support.


Work and leisure may be time substitutes for each other, but they are not fiscal substitutes. One leads to income, one generally means expense. And taxation's first reason for existance has nothing to do with demand. It's about financing the government, specifically to fund those social necessities (like defense) which would not be properly provided for by normal activities.

You haven't got a clue on government administration or use of taxation. You use fiscal policy taxation to control aggregate demand side and you use monetary policy to control supply side. These two issues have been fundamental topics between Keynesians and Monetarists for the last 30 years or so.

You're not the first to bring up stagflation as a prospect. Maybe you're right. That would indeed by like a grinding economy, but you incorrectly equate that to the term "recession". Recession is a techincal term for two consecutive quarters of negative GDP growth.

Never claimed to be the first. Purely pointing out my opinion about a retarded economy and inflationary pressures. It's confusing when the Fed points to either side saying no need for rate cuts as economy is doing well if you look at this and poorly if you look at that. The Fed like a mixed up kid not leading the markets but following the politicians.

As for needing to raise taxes to curtail demand, that's only one possible tool. Anything which reduces the amount of money people have to spend and/or increase the price of what they would purchase will serve.



I was referring to the budget deficit. At no point in this discussion have I spoken in regards to the BoP. Well you need to look at the twin defecits. So what if you haven't mentioned it? I have! You can't isolate micro and macro economics. Economists may do in their surreal world but not in the real world.



Again, tell me what tax breaks they receive that other companies do not. There are loads of tax breaks being handed out to all kinds of companies in all areas. One could quite reasonably argue that those breaks incentivizing the oil companies to do more exploration are a good thing right now to bring more supply online. Not that I wouldn't mind seeing us do something about alternative sources.

I thought I already had. For exploring new oil wells. Drilling in numerous places where they think there may be oil.

Here read it for your self and knock your self out.US House seeks more oil royalties, kills tax breaks

Instead Bush the oil man favours tax breaks for oil giants and no R&D for alternative fuel. He is either very bright or very dumb. All I can say is he knows which side his bread is buttered on.



No. You are supposed to use a combination of fiscal (taxes and spending) and monetary policy. Here I agree with your 100% and was exactly the thrust of my arguement all along. Rate cuts and tax rises.



I think by "aggressive" you mean "progressive". Yes quite right. The grey cells need recharging.

As for my own leanings, I would tend to favor a flat tax structure.


Define "unequal". I was refering to income and taxation. One person earning £10,000 and another earning £100,000 are unequal. Hence should be taxed unequally. I would favour progressive taxation.



If by "Government surpluses" you mean deficit spending, then you're absolutely correct. And don't we have a bit of an issue with inflation? The Fed seems to think so, especially if you believe the statistics are understated. Not just internally externally also. Just look at the value of the dollar.



Damaging corporate US sales? You're kidding, right? War is perhaps mankind's most profitable venture. All that government spending is going somewhere. Can you say Haliburton?

Some people believe the Pentagon allowed the assasination of president Kennedy because he wanted to cut their budget. Indeed they and various suppliers including BAE may be rubbing their hands of profit. This may well be the case. However, if all that R&D and weapons can't be turned into consumer consumption/benefit public good etc then it's pretty useless in skewing national gains. Slam dunk case certainly for the Neo-Cons who win out-right whilst American citizens suffer in pain and little pensions.

I concur with TWI's description and I thought the film 'The demolition man' came pretty close to it. The haves and the have nots. Total control and domination.

Dageshi your comment about cutting back taxes to make oil cheaper is amazing? I can see it is a vote winner but how does that help with the twin defecits which is what's killing the US economy.

 

[Rhody Trader]

The cheese between the rich and poor is not well distributed. Ask the poor *******s at the far end of no medical cover, no pension and no work and for some no limbs with little or no support.

My point is that folks at all points of the spectrum consume imported goods. You don't think it's just the rich kids getting toys from China that contain lead paint, do you? Some imports have common costs (like energy). Some do not (like German luxury cars vs Japanese economy cars).

You haven't got a clue on government administration or use of taxation. You use fiscal policy taxation to control aggregate demand side and you use monetary policy to control supply side. These two issues have been fundamental topics between Keynesians and Monetarists for the last 30 years or so.

You have no idea what I have a clue about and what I don't, so let's not make this personal and keep it to a considered discussion of the topic at hand.

Fiscal policy is not just taxation as you seem to be suggesting. It's spending too. If the government only taxed it would suck all of the money out of the system, stifling growth. If it only spent, it would flood the system with money, causing rampant inflation. Reasonable fiscal management walks a path in the middle somewhere, attempting to stimulate growth without creating excessive inflation.

Yes, taxation can be used a policy tool. But so too can spending. The government can tax those things it does not want to encourage or provide tax breaks for those it does. Likewise, it can spend money in areas it wants to promote and withhold funds from areas it doesn't.

First and foremost, though, government spending must provide that which the economy, if left to it's own devises, would not effectively provide for itself - like defense, infrastructure, etc.

Well you need to look at the twin defecits. So what if you haven't mentioned it? I have! You can't isolate micro and macro economics. Economists may do in their surreal world but not in the real world.

I haven't brought up BoP here because we have a nice corrective system in place in the form of forex rates. Given the chance by politicians and the like, that stuff will work itself out over time. We've seen a bit of that happening lately with the growing export figures that have been posted.

As for the budget deficit, it's shrinking thanks to growing tax receipts. Is it your intention that we go in to surplus? If so, watch the brakes get put on the economy.

I thought I already had. For exploring new oil wells. Drilling in numerous places where they think there may be oil.

When you start talking about getting rid of the tax breaks for companies in other industries, I might join you. As I've said, I'm not in favor of singling out one particular industry just because it happens to make a lot of money.

I was refering to income and taxation. One person earning £10,000 and another earning £100,000 are unequal. Hence should be taxed unequally. I would favour progressive taxation.

That's what I thought. By your definition then, if both were to pay a 10% flat tax (for example) they would be taxed unequally. The latter person would pay 10 times as much. I'm fine with that.

Not just internally externally also. Just look at the value of the dollar.

Not sure what you mean there. Internal vs external inflation? Inflation is a decline in the buying power of a currency. We agree that the dollar has been losing value.

However, if all that R&D and weapons can't be turned into consumer consumption/benefit public good etc then it's pretty useless in skewing national gains. Slam dunk case certainly for the Neo-Cons who win out-right whilst American citizens suffer in pain and little pensions.

Wait. I thought you wanted to decrease consumption.

But to the point, it's not as if all of the money spent on a government contract stays with the defense company on the receiving end. Sure, they keep some profits, but the bulk of the money goes to employees and other companies with which they do business, most of whom have nothing to do with defense. In other words, the money makes it way in to the economy.

I'm not saying it couldn't be spent better in other places. Much of it probably could.

 

[Hook Shot]

questionable value #6

Not sure whether carry trade is going ...gone or whatever ..

I do know that NZD/Yen & AUD/Yen are looking very interesting right now...potentially pivotal ?

Nzd/Y camped at 86 yard line and could see 88-90 if ...
Aud/Y simmering just below 100 and could see 103-104 if....

If carry is saying goodbye then these will be good plays in coming days - remember aug..

But then again what do I know ?

 

[jacinto]

Not sure whether carry trade is going ...gone or whatever ..

I do know that NZD/Yen & AUD/Yen are looking very interesting right now...potentially pivotal ?

Nzd/Y camped at 86 yard line and could see 88-90 if ...
Aud/Y simmering just below 100 and could see 103-104 if....

If carry is saying goodbye then these will be good plays in coming days - remember aug..

But then again what do I know ?

good points HS

usdjpy not helping that though. keeping an eye open. never know when correlations might kick in

 

[SAINT]

I don't think it really matters what it decides to do does it?

The important thing is they'll undoubtedly be tradeable opportunities up & down the ladder for those patient enough to execute with appropriate set up's?

Good point! The strength of move and the weight of money which followed the currency up mean that on either side of the trade (if it continues) then there would be great profit opportunities. Traders will always prefer to be in positive yield trades but at some point the price level has to reflect underlying fundamentals.

GBP/JPY fell 3000 pips in a few weeks during the credit panic and I think that says it all about long-term strategy on the pair and the carry trade.

 

[ampro]

Traders will always prefer to be in positive yield trades but at some point the price level has to reflect underlying fundamentals.

When events like we’ve witnessed recently begin to unfold, it also reflects the far more important & interesting emotional health of the participating brethren too! And that aspect is always much more enjoyable to observe & partake in.

To use your Geppy reference as an example, just sling a large hourly chart up & take a peek at the activity across the past 8-10 weeks.

Anyone with a robust short end strategy, a half decent take on s&r and a tight handle on position management, will have had a field day advantaging themselves of all the hustle & bustle.

Once all the knee-jerk huffing & puffing blew itself out (for now), they even had the decency to construct a sedate little range to get stuck into whilst they ponder the next move!

Good eh?

Leave all the debating as to the future of the carry to the talking heads & over paid analysts. Long as the intra-day & week ranges stay healthy, who gives a s***

 

[inggscap]

EUR/JPY been doing well the past week, GBP/JPY just joined the party. I think the interest rate gap is still very attractive, the issue comes in with the pips as we usually make more from the trend than the interest, the interest is a bonus really. So when pips go missing, I'd rather collect the profit and short, than worry about getting an attractive interest rate on the long.