trading recap

Global power continues to shift. Dilma Rousseff, former Marxist guerilla and now Brazil’s first female President, spoke with Obama and discussed US unemployment. She called to end “Currency Wars”, pledged fiscal conservatism – S&P/Fitch will consider an upgrade. Obama lost mid-terms, sold Saudi’s $60bln of weapons, had the boys warm up Air Force One and jetted off to Asia. Korea’s FX reserves hit new highs

The G20 called for a truce in FX mkts and offensive operations ceased. The generals surveyed the field, stocked up on supplies: bought insurance (VIX +13%); food (corn +4%); and Gold (+2.5%). Stocks & Dollars were quiet/stable as foot soldiers, safe in foxholes, spent more time debating QE2 than fingering buy/sell triggers. India’s Singh announced an alliance with Japan to mine rare earth metals, circumventing Ch

There’s a war in progress. The world needs a grown-up in the sandbox or kids are gonna get hurt. WTO’s Lamy tried to assume the role, lectured the children, “History will judge us harshly if our collective efforts to exit the crisis were to be frustrated by short-term rent seeking.” BOE’s King pleaded, “What is needed now is a grand bargain among the major players in the world economy.” Geithner sent a letter to G20

The Chilean miners emerged from their dark hole, a fitting metaphor for the triumphant rise of Latin America. ‘10 inflows to LatAm bonds are 5x previous record set in ’05. Credit default spreads on BRIC countries tightened to 40bps above developed nations vs 360bps in Mar ’09. China roared: FX reserves hit record $2.65trln, real estate sales jumped 50% m/m, reserve requirements increased, stocks surged 8.5% and the Y

Global politicians debated the precise meaning of “currency war”; took me back to Clinton’s “what exactly is the definition of is” days. Meanwhile, in the voting booth, traders pulled the “Sell” lever; USD fell vs everything. Gold made new highs (yawn) and commodities surged (S&P 500 included). Grains rocketed, raising food shortage fears. Russia & India welcomed stronger currencies to help fight inflation. B

Brazil’s Fin Min Mantega started the wk by stating the obvious, warning of an emerging “currency war” on Mon. Geithner ended the wk, embarrassing himself on Fri, saying he wasn’t sure what a currency war is, but at any rate “we’re not going to have one”. Ever eager to teach bumbling Treasury Secretaries valuable lessons, Mr Market pressed the USD lower vs everything. Gold hit an all-time high, oil broke $80 and coppe

The mkt jumped and dollar dumped Mon in anticipation of Bernanke restarting his printing press. Free money is such a powerful hallucinogen that you see all kinds of funny things. The PIIGS had good bond auctions, despite CDS in Ireland jumping to record highs (476bps). But more surreal was Petrobas’s $70bln share issue, 3.7x the biggest IPO ever, 10 days before presidential elections. Elsewhere, some lousy news conti

StrongChinese data printed, IMF judges said they’ve stuck a “soft landing”. New Basel III rules gave banks 8yrs to issue new equity capital, hilarious & predictable. EU & US data wasn’t great, no surprise there. But elsewhere, oh my, Erdogan won his referendum, Turkish stocks hit record high; Lira jumped. India hiked 50bps on robust growth/inflation; Rupee surged. Japan’s Kan survived leadership challenge, vo

What a silly wk, hot air and garbage everywhere. WSJ announced the stress tests were unreliable (my kiddies knew that), and FT announced German banks need $135bln to meet rule changes (of course the rules won’t change for yrs). But the beach boys, hungover and tan, saw the tape on Tues and sold, sold, sold. Anglo Irish split into a good/bad bank, said, “the final cost won’t bankrupt Ireland”; so now we know the odds