We Are in the Mother of All Carry Trades: Roubini

manhattan

Everything is about Dollar.........

http://www.cnbc.com/id/33477456

manhattan

Can we interpret the logic as this: FED will end its bond buying program in the next 3 to 4 months...dollar will go up as as result...then people have to unwind their carry trade and cover shorts on dollars...dollar will go up even more...TLT and commodities will go down.....index is going down...

AGA7d

Roubini seems to have a big problem on high commodity price and always misinterpreted the cause. He thinks it is the speculators. Actually it is the currency.

A stronger dollar can mean usd vs other currencies. Why commodities cannot rise against all currencies if they are harder and harder to get? Betting currency against commodities is simply foolish, or a losing proposition.

Another problem is so-called strong dollar - how can dollar go strong if there is no policy at all supporting strong dollar? Absent a crisis, strong dollar is just a fantasy.

Though Roubini and Peter Schiff both are famous in predicting the melt-down, there is a difference. Peter Schiff is a straight shooter and nailed the problem which is the debt. He said the economy is not getting better because of the additional debt. Roubini actually is a wavering academic - just a few months ago he said economy was getting better, now he went back to the doom and gloom again for a wrong reason.

manhattan

Peter Schiff is saying hyper inflation and depression........much more bearish than Roubini...Peter is extremely bearish on dollar, but there are indeed statistically significant high correlations between commodity price, dollar and index most of time (not all time though)...you can line their charts together to see what it looks like, or run regression test.

AGA7d

If US stays its course, you will see Schiff be right within 10 years. His prediction on housing comes rather quickly because the bubble has been building up rather quickly, and big in size. The dollar bubble is much slower since the world economy is the base. But at the rate of $1.4 trillion more printing a year, the world will be saturated with usd in 10 years.

manhattan

Peter mentioned a few days ago that dollar index might have short term bottom at 70 and euro might top at 1.60...let's see...

manhattan

i don't think US will print money like crazy in the next few years..they will and have to stop....they are discussing the exit strategy now...but it is thorny one though as to exit...

AGA7d

More talk is on the exit strategy of Fed's two trillion book- the gov deficit is much harder to chop. It will require real leadership from the prez and a 当头棒喝 to the law makers.