I hopped onto several wirehouse conference calls today, read a shit load of research reports, listened to Bloomberg and CNBC all day and the overall consensus amongst the financial elite is they haven’t the slightest idea what the fuck is going on. It was something to behold, the highest paid bankers unable to tell you how large the yen carry trade was and if it was going to wreak havoc for an extended period of time. The best answers were the obvious one: markets generally trade up and the economy is good, backward looking. And also the yen is simply normalizing to a more traditional level, suggestive that we might move lower to perhaps the 135 level.
Because of my professionality, I was entirely covered during the trap and only shed 29bps, managed several successful day trades, added to down positions, and took a hedge into tomorrow but slightly smaller than the one I took on Friday. It’s important that you understand that marks to not iShape collapse lower forever and bounces, even in the worst markets, can and will be severe.
It would not surprise me to see the BOJ attempt to rig markets and/or markets soar at the open tomorrow, only to barrel lower in fastidious fashion, racking all of the complacent with heavy tax losses.
This has to be the most subtle and subdued market calamity of all time, with most investors unmoored by the calamitous action, totally confident in the idea of an effervescent market to spring back toward and ingratiate them with milk and honey. The landscape is indeed acrid and Iranian missiles are soon to be airborne and all of your retarded friends will be washed for good, so think about that before you overzealously declare this crisis has ended, after only dropping in some areas a mere 30%.
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