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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Carlos Blanco who wrote (22832)12/4/2004 12:33:39 PM
From: russwinter  Read Replies (2) of 110194
 
I completely understand your premise, and largely agree with it. Where I depart though is in the area of what I'm now calling "synthetic economics" (use SE for short). I believe the trader/fund community is large and quite loonie, and much more dominant in leveraged paper trading than you seem to suggest.

We've seen examples of their behavior over and over this year, including last week in commodities and especially energy. These guys don't just go from bullish to neutral, they go from bullish to bearish and to extremes despite little or no change in the core fundamentals.
Message 20823134
They just get offside, and then panic on news that makes little sense. In the case of the USD, it could be something as simple as a rate hike (Europe should have hiked and didn't) and a change in MoP language of the kind you and I would probably laugh at. Frankly, I don't know what the trigger will be, and that's the trouble with today's trading environment. In fact when the rally in the USD comes I'll predict all of us will be doing a WTF (what the fuck). I was cautious on energy, and now am doing a WTF on that sector. Like the energy rout this week, I will likely consider the USD pop to be an opportunity to go anti-Dollar.
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