Wednesday, May 16, 2012


                                          Is She Hurting You?

And while she is blowing up the Japanese bond market, she ain’t exactly doing gold any favors either. Somebody at the Central Planning prop desk over at JPM has obviously forgotten to email me and let me know she is back in the market.

“Mrs. who?”

[For your personal education and amusement I introduce you to her famed exploits.]

She hasn’t been this active since she got caught on the wrong side of the GBPJPY carry trade in 2008 [June 2008 GBPJPY about 215.00 – January 2009 GBPJPY about 120.00] and took a 40% + haircut on a ‘sure thing”.

Amazing how many sure things ain’t that sure.

Think back a second to the Asian trading session following the “Leap Year Massacre” in gold on February 29; which in about 4 hours gold tacked on about $40 / oz. in price [1685 to 1725] on a straight up bargain of a lifetime massive demand spike from Asia.

They should have used my advice from yesterday: “If you are gonna buy the dip, you better be willing to sell the rip.” Sadly, no can do and/or no wanna do. Why sell it higher when you can easily sell it lower later?

Subsequent sessions since then have seen gold stage some pretty good 2 and 3 day rallies, only to be crushed by the Central Planners. Undaunted, Mrs. Wantanabe bravely kept buying. Interesting thing happened though the third time gold came back to the 1630 area from loftier heights; Mrs. Wantanabe and her pals [affectionately dubbed the “Lemmings in Asia” by yours truly] started selling, and selling, and selling some more.

Which brings us to the present day $140 haircut ain’t-this-fun-waterfall in gold. Not interested in seeing the mistakes of the past repeated, most notably the above mentioned carry trade and multiple trading debacles in Spanish and Irish bonds, they simply are doing what every trader at some point has to do: puke.

                             Bullwinkle J. Moose Shows The Way

“Hey Rocky, watch me pull a rabbit out of my hat. Button up my sleeve ...”

We all know how that turns out.

Have a good day everyone.


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