Custom Search

Friday, November 9, 2007

The Carry Unwind Accelerates

Yen Advances to 18-Month High Against Dollar as Stocks Decline: “The yen rose to the highest since May 2006 against the dollar as investors shunned riskier assets bought with loans in Japan. The U.S. currency erased its decline against the euro after dropping to a record low.

The yen climbed against all 16 most-traded currencies after stock indexes in Europe and Asia reversed gains and U.S. equity futures declined. Shares of Barclays Plc fell as much as 9.1 percent on concern Britain's third-biggest lender may announce a writedown of as much as 10 billion pounds ($21 billion). Wachovia Corp., the fourth-largest U.S. bank, said it may raise its allocation for loan losses.

“Risk aversion is coming back to the markets,” said Adam Boyton, a senior currency strategist in New York at Deutsche Bank AG. “The writedowns from financial companies tell you that subprime is a significant issue and dealing with its hangover is going to take some time. The yen will continue to benefit.””

Translation: It is slowly starting to sink in that borrowing massive amounts of money in a declining, low yield currency and investing the proceeds in risky assets in high yield currencies can become a really significant problem really quickly when those risky assets don’t perform as intended.

The Carry Trade unwind is accelerating… global de-leveraging is in full swing now. Expect continued weakness in equities.


Sneakers hobbies said...

nice post!!
We have
tennis rackets
babolat tennis rackets
wilson tennis racquets
tennis racquets
wilson tennis racket
cheap babolat tennis racquets
cheap tennis racquets
with excellent quality!!Welcome to our store.

Anonymous said...

Since their popularity pandora sale in Paris during the pandora jewellery uk mid 1920s, they have pandora shop continued to capture the hearts of beautiful pandora 2010 brides across the globe. Nothing pandora jewelry beats the elegant and classic appeal of antique art deco rings together new pandora beads with a mans sweet promise of everlasting love.If you are planning to choose from pandora bead different antique art deco rings and to use them for your wedding proposal, then continue reading this pandora beads sale article. It explains some of the pandora glass beads most striking features of art deco rings as well as some reasons pandora style beads why these one-of-a-kind wedding rings are worthy investments.

Anonymous said...

"This treatment is a mask for the night,"chi flat iron said Onysko. "It makes the skin moist and if you wake up in the morning, you are brilliant."

Calling this mask ischi hair straighteners that it does not have to wait. Instead of turning on and off at specified time, he worked all night, as the skin goes through its repair mode, so that

Momentum, chi flat ironsa feeling of freshness throughout the day after Onysko.